Gold Technical Analysis – The bullish bias remains intact

Fundamental
Overview

Gold erased all the gains from the US NFP report on Monday with
some pointing to the news
of China
remaining on pause for the second consecutive month on gold
purchases as the likely culprit. Overall,
nothing has changed fundamentally, and the bullish bias should remain intact.

As of now, it looks like gold have limited downside but lots of upside as
inflation abates slowly while risks to the growth picture increase the longer
the Fed keeps policy restrictive. In the short-term, strong US data might weigh
a bit on the market, but in the long-term weak data is likely to trigger bigger
upside moves.

Gold Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that gold has been on a steady rise since bottoming out near the key 2277 support. The buyers are now looking towards the upper
bound of the range around the 2430 level. If the price gets there, we can
expect the sellers to step in to position for a drop back into the 2277 support.

Gold Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can
see that the price pulled back from the 2387 resistance and bounced on the trendline.
The buyers piled in around the trendline with a defined risk below it to target
a break above the resistance. The sellers will likely step in around the resistance
again to target a break below the trendline and increase the bearish bets into the
2277 support.

Gold Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can
see that the price is breaking above an important zone today. We can expect
more buyers piling in around these levels to position for a break above the 2387
resistance.

The sellers, on the other
hand, will want to see the price breaking below the trendline and the 2350
level to turn the bias more bearish and position for a drop into the 2277
support. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow is going to be the most important day of the week as we get the US CPI
and the US Jobless Claims figures. On Friday, we conclude the week with the US
PPI and the University of Michigan Consumer Sentiment survey.

See the video below

This article was written by Giuseppe Dellamotta at www.forexlive.com. Source