Gold Price Forecast: XAU/USD sees a dead cat bounce, with death cross in play
- Gold’s recovery appears shallow amid a risk-on mood.
- Covid vaccine and stimulus optimism led reflation trade weighs.
- Weaker DXY lends support to XAU/USD but the daily chart warrants caution.
Gold (XAU/USD) has stalled its three-day decline but struggles to find its feet amid the upbeat market mood. The reflation trade keeps the market mood buoyed on prospects of US stimulus and coronavirus vaccine-driven faster global economic recovery.
The riskier assets such as the Treasury yields are on the rise, weighing negatively on the non-yielding gold. The renewed US-Iran geopolitical tensions fail to attract the gold buyers, as the daily technical chart continues to paint a bleak picture, in absence of fresh economic releases from the US.
Gold Price Chart - Technical outlook
Gold: Daily chart
As observed in the daily chart, the gold price faces stiff resistance around $1827, as of writing.
The near-term technical set up favors bears after a death cross was charted on the said timeframe a day before. The death cross formation is registered after the 50-daily moving average (DMA) cuts the 200-DMA from above.
Further, the 14-day relative strength index (RSI) trades within the bearish region, backing the case for additional downside.
A test of the Feb 8 low of $1808 remains on the sellers’ radar, below which the January 18 low of $1803 could be put at risk.
Meanwhile, the bearish bias remains intact so long as the price holds below the 21-DMA at $1838. The next powerful hurdle awaits at $1858, the confluence of the 50 and 200-HMAs.
Reprinted from FXStreet,the copyright all reserved by the original author.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.