Gold Bullish trend leads the price to 7 years high yesterday. After an impulsive and non-volatile move, Gold was able to push the price higher toward $1610. Let’s check Gold Technical Analysis for more levels and insights.
February 20, 2020 | AtoZMarkets – The Gold reached a peak at $1610 key area after an impulsive move. The Bullish move was carried by the support of dynamic levels like 20 EMA, Kijun line and Tenkan line. As per the current price action, the price may retrace towards a $1600 support area before further bullish momentum.
The Gold gained more than 5% so far this year. The Gold price reached its highest level since 2013 due to the fear of the new Coronavirus and its impact on global growth. Moreover, the Fed may cut interest rate that was also cited as a tailwind. The Coronavirus outbreak of the Hubei province reported 132 deaths for February 18. According to the Chinese government, there are 74,186 confirmed cases of the virus.
On the other hand, BK Asset management’s Boris Schlossberg said, the market appears to be avoiding the long-term negative economic impacts of China’s shutdown. While at the same time hedging the risk by taking Gold higher. The Gold had to battle with a split personality market, as demand for the extreme haven asset.
Gold Bullish Trend may Push Higher Toward $1630 Area
Gold is currently residing near the $1600 area, which may now become support before breaking higher. Gold may retrace before continuing its Bullish pressure. The dynamic level of 20 EMA is also working as a support for the Gold’s Bullish trend.
image: Gold 1 Hour Chart
According to the 1-hour chart, the Gold Bullish trend successfully breaks higher with support of dynamic levels. Bears may take control and lead the price downwards to the $1600 area before regaining the Bullish pressure. The dynamic level of 20 EMA is carrying the price as a support, along with the Kijun line and the Tenkan line. It may give the price more strength to it higher towards the $1630 area.
Additionally, the MACD lines are also residing above the 0.00 level for a longer period of time. It is supporting the price as the confluence of 20 EMA. The MACD histogram is not showing any Bullish indication, as it remains with a bearish volume.
Gold may Find Support at $1590
image: Gold Daily Chart
According to the daily chart, the Gold Bullish trend successfully pushed the price higher toward the $1610 area. After a non-volatile and impulsive momentum price is now retracing lower. Bears may push the price down towards a $1590 daily support area. The dynamic levels like 20 EMA, the Kijun line and the Tenkan line are far away from the price which may pull the price down using the Mean Reversion. If Bears manage to pull the price lower the Bullish momentum may continue after a certain amount of correction.
Additionally, the MACD indicator is showing an emerging Bearish divergence, which can help Bears to take over the market soon.
To conclude, after a Bullish non-volatile and impulsive momentum, the price may find support at the $1600 area. If Bearish pressure takes the price toward a $1590 support area with certain bounce, the price may continue higher towards the $1630 area.