XAUUSD, H4
This week is a very important week, as several Central Banks (RBA, BOC & ECB) will provide clues on the direction of the global economy amid the development of the virus and the impact of lockdowns in several countries. Gold prices jumped 1% higher to close last week. XAUUSD’s rise to test the August high on Friday over $1832.00 was also following Fed Chair Jerome Powell giving the green light to start easing its QE program in late 2021. Two weeks ago in remarks given at the Jackson Hole symposium, Powell also said that the inflation spike would fade over time, dimming expectations. previous increase from the cycle of rising interest rates.
Markets were expecting an early start. The Greenback lost ground soon after the speech, and last week again the not-so-good US jobs data put the USD under further pressure and the higher Eurozone inflation data allowed XAUUSD to equalize on the 8 week high price average in the range of $1834.00.
The intraday bias remains on the north side, although it was blocked by the resistance at the 61.8% retracement level. A break of this level would target the 76.8% retracement level in the price range of 1863. The price remains on the upward path, supported by the 200 exponential moving average, but overbought is seen from the overbought level on the RSI which could send gold into a price correction. Attempts to develop the price decline and test the support level near the 1801 area are possible as long as the average resistance holds in the near term. However, further movement below 1801 will imply a correction towards 1776 and 1749.
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Ady Phangestu
Market Analyst
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