Gold has been quite volatile and indecisive over the week. Gold failed to hold its safe-haven image and dropped below $1700 area with a daily close. Can XAU strike higher in the coming days? What are the charts and technical indicators are saying? Read more to find further insights into today’s XAU/USD Technical Analysis.
May 7, 2020 | AtoZ Markets – Gold is currently residing near $1690 area and trying to decline further. Moreover, the price broke below the dynamic levels on the intraday chart, which indicates bears are quite strong. XAU may push the price lower before continuing the bullish trend in the coming days.
Gold Failed to Hold Its Bullish Momentum But Still Above $1650
Gold price dive into the lowest level of this week. As the U.S. dollar strengthened amid concerns over the sustainability of the earlier strength in risk assets. Furthermore, the equity markets dozing after their best month in years, and Oil price also hit by short-term profit-taking, trading in havens was hectic, as the economic data and some mixed corporate updates propelled notice. Besides, Gold futures were down by 1% at $1693.50 an ounce, while Spot Gold was fell by 1% at $1689.52 an ounce.
On the other hand, Federal Reserve President James Bullard told CNBC earlier, “He expects Friday’s official labour market report to be “one of the worst ever”, with the unemployment rate close to 20%.” He added that “The rate could come back below 10% by the end of the year if the support measures enacted since March work.”
Gold Bulls Are Still Present in the Market
XAU is currently residing near $1690 area and trying to push lower. Moreover, the price had a daily engulfing bearish close below $1700 area and may retrace further down before continuing higher in the coming days.
Image: Gold 4 Hour Chart
According to the 4-hour chart, Gold is currently residing near $1690 area and quite indecisive. The price broke below the dynamic levels, and also find resistance at the Kumo cloud. As per the current scenario, if the price can have a 4-hour bearish close below $1680 area, the bears may push the price down towards $1650 in the process. Alternatively, if the price breaks above $1700 area with a bullish 4-hour close, Gold may recover higher towards $1750.
Furthermore, the dynamic level of 20 EMA is currently residing above the price, along with the Kijun line and Tenkan line. The dynamic levels may work as strong resistance to push the price down. In contrast, if the price can break above the dynamic levels and also the Kumo cloud, the bulls may push the price higher in the days ahead. Besides, the Stochastic Oscillator lines were residing above the oversold level 20 and had a bullish cross over, which indicates bulls may gain momentum in the future.
To conclude, as Gold failed to hold the bullish bias above $1700. It’s indicating that bears may take deeper retracement towards $1650. A strong daily close in requires to find the definite momentum in the coming days.