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XAUUSD Gold Forecast : Testing the critical support

XAUUSD Gold Forecast: Testing the critical support

Fundamentals: 

Gold prices are under a strong selling pressure weighted down by surging momentum in the U.S. dollar as monetary policy between the U.S. and Europe continue to diverge.

Despite hawkish sentiment from FED, Gold price was able to hold above the psychological support level of 1300 USD.  But Friday was the breaking point. After the big breakdown in the EURUSD exchange rate yesterday, the positively-correlating gold was always going to struggle to sustain its gain

I believe that we will see further softness in Gold. However, since the uncertainty remains high in the face of a growing trade war between the U.S. and China, I plan to use this bearish movement as buying opportunities.

The main question is ” when/where to buy?”

I do not think we will face a major sell-off in Gold. No major catalysts to push the prices higher, but there are factors which may change the negative sentiments soon especially as the Trump administration approved $50 billion in new tariffs on Chinese imports. It is expected that China will again retaliate with its own tariffs on U.S. imports, with agriculture products in the crosshairs. The political environment will keep Gold Bulls alive.

One more thing to keep eyes on is the FED’s focus on global trade and economic issues. If the Fed becomes really concerned about trade issues that would have very positive effects in XAUUSD.

Technicals:

XAUUSD ended the week 1278.45 below EMA 50,  EMA 100 and EMA 200 in daily charts.

As seen in the above Daily Chart, the price is testing the trend line support.  We see a double bottom pattern as well. A real critical support. This level is the EMA 200 support of the weekly chart as well.

I want to share another chart:

1281.30 MM 2/8 Pivot Major Pivot/Reverse. A daily closing below 1282 will carry the prices  1265 USD.  This is the level where the bulls will leave the game for a while.

In the smaller chart timeframes, 1273 appears to be the key level before 1265.

On the upside; 1285 and 1289 .47 are the possible pullback levels.

Conclusion: 

The two major reports to be released next week is housing construction data for May and regional manufacturing data from the Philadelphia Federal Reserve. Powell and Draghi will speak t a European central bank conference next week, however, markets are not expecting any major surprises.

We will publish our trade idea for premium members later today, Our main – midterm –  strategy is to look for potential buying opportunities. 1265 and close above 1289 are our key levels to buy.

If you look for a short-term trade opportunity;  sell below or buy above 1281 ( H4 closings ).

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DISCLAIMER: This is a technical analysis study, not an advice or recommendation to invest money

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XAUUSD Gold Forecast: Forex Trading involves risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

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Ercu Kartas

Treasury Department Dealer Technical Analyst FX Trader

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