Dukascopy - Analytics


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    XAU/USD challenges 100-day SMA

    © Dukascopy Bank SA
    "Gold prices have held over $1,200 an ounce despite technical weakness, the near certainty of eventual Fed rate rises, U.S. dollar gains and U.S. yield increases."
    - HSBC (based on Bloomberg)

    Pair's Outlook
    Despite broad bullishness of the US Dollar on Thursday, the price of gold retained its upward momentum and hit as a result resistance at 1,215.68/1,211.90, created by the 100-day SMA and weekly PP. Although we do not rule out a possibility of XAU/USD closing above the long-term moving average and then targeting supply between 1,226 and 1,227, the correction is expected to end here. The daily and monthly technical indicators are mostly bearish, and a major reversal will probably transpire lower, either at the 2013 low at 1,180.35 or at the 2014 low at 1,131.30.

    Traders' Sentiment
    The tendency of the bulls to leave the SWFX market did not persist. Apparently, a sharp two-day increase in price of the bullion encouraged more people to go long the metal, as the percentage of bullish positions increased from 65 to 70% during the last 24 hours. The average for 10 days is at 68%.

    © Dukascopy Bank SA

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