XAUUSD Gold Forecast: One tweet and a trend reversal?
As our senior members know, we are Bullish on XAUUSD longer term, however, the bearish trend is likely to continue for a while. ( More optimistic, until September )
Somebody wakes up, tweets and the trend is reversing? Something more is needed. Gold’s bounce started Thursday afternoon after Trump said that he was “not thrilled” with rising interest rates as they are hurting economic growth.
More important, he accused China and the European Union of manipulating their currencies, taking away the U.S.’s competitive edge.
So, the question is: “Are Trump’s comments going to stop the Fed from raising interest rates.?” Fed seems committed to two more rate hikes this year.
While physical demand – adding the negative seasonal effects – is expected to pick up with prices hovering near a one-year low, we believe the market needs a weaker U.S. dollar to take the Gold Bulls into the arena back.
Markets already know that Trump does not like the stronger Dollar, what he said is nothing new. What we see is markets were taking profit of latest sell-off.
We have a DXY chart, which can guide us on our XAUUSD trading.
Dollar Index is still in the positive bullish territory. If DXY breaks out the trend line and enters into the cloud, we can start to talk about a trend reversal. We need to see a few clear daily closings below 94 – 93.80, which refers to 1250 XAUUSD.
Gold price is likely to consolidate at 1236 – 1246 zone if DXY breaks below 94.37. But, before, XAUUSD needs to break and close above 1234.40 – EMA 50 on H4 Chart and MM 2/8 )
On the smaller chart time frames:
M30 Chart, a busted I SHS pattern completed. If the pattern works well, the targets are 1236 and 1246.
Conclusion: Gold must make clear daily closings above 1250 USD to talk about a trend reversal. And blue descending trend line must be broken for the bullish continuation.
Gold tested the first target of the SHS pattern. But failed to break above. Bounced back to the neckline. Close below 1227 and the price is likely to test 1223 and 1217. But we need to see the price make H1 closing below 1227.
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