Gold creates new high breaking all barriers above $1630 area. After a non-volatile and impulsive move, Gold managed to push higher as expected towards $1630. Let’s check Gold Technical Analysis for more levels and insights.
February 21, 2020, | AtoZMarkets – Gold creates a new high at $1630 key area with consistent impulsive move recently. After breaking above $1610 area, Bullish pressure sustains toward $1630 key area and still pushing higher. As per current price action, the Gold may correct near $1630 resistance area and may retrace before Creating New Highs along the way.
Gold price creating new high is at seven years high price point concerning the spread of the Coronavirus beyond China. The Gold Bulls boost this week as a safe-haven asset after China implemented fresh monetary stimulus measures to fight the economic impact of the Coronavirus outbreak. Gold is currently reporting 7% gains on a year to date basis.
On the other hand, the dollar index, which tracks the value of the Gold against majors, has gained 3.5% so far this year. Dollar strength usually hurts Gold, but this time it has failed to deter investors from pouring money into Gold. It may happen because of increased demand for United States treasuries.
Gold Creates New High may Continue Momentum
As per current price action, Gold may push higher toward $1700 area. The dynamic level of 20 EMA is currently far from the price, which may push the price lower as Mean Reversion. If Bullish momentum continues, the price may break all the recent record high by reaching 2013 highs.
image: Gold 4 Hour Chart
According to the 4-hour chart, the Gold is currently residing above $1630 area. The Bullish pressure may continue further if the Bulls can make a strong close above $1630 area. However, as per the dynamic level, 20 EMA’s Mean Reversion price should retrace toward $1610 area before it makes a new high. The Kijun line and the Tenkan line also residing with 20 EMA as a confluence.
Additionally, the MACD line is also residing above 0.00 level from a long period. The histogram volumes are also working as confluence of MACD line, which is a good indication for Bulls that Bullish pressure may sustain.
Gold may Find Support at $1610 Area
According to the Daily chart, Gold is quite an impulsive and non-volatile. After retraced from $1580 area, price pushed higher as expected. Bullish pressure dominated the Gold very well, which led the price toward $1610 area impulsively. The Gold may now retrace according to the 20 EMA’s Mean reversion rules. The price is expected to show downward pressure toward $1610 area before it continues the Bullish momentum.
image: Gold Daily Chart
Moreover, the MACD histogram is currently showing an emerging Bearish regular divergence. It may lead the price toward the $1610 support area as a form of retracement, but the MACD line is not showing any sign of divergence currently.
To conclude, after Creating New Highs the Gold may retrace down toward $1610 before it continues Bullish trend in the coming days.