The gold price had a false break below the $1695 support area and still trading within the buyers’ zone. Gold rejected the $1695 support levels and consolidating above it, can it create a new higher high? What are the charts and technical indicators are saying? Read more to find further insights into today’s XAU/USD Technical Analysis.
April 29, 2020 | AtoZ Markets – Gold managed to have a daily close above the $1695 area, but the bullish price action is not strong enough. Moreover, the price consolidates at dynamic levels on the intraday chart. As per the current scenario, a daily close below $1695 in XAU price may correct lower before creating another bullish impulsive pressure.
Gold Price Consolidating Ahead of FOMC
Gold prices slipped on Monday and Tuesday despite a decline in the US Dollar. However, the drop came for falling US yields, generally, influence gold prices. The Fed started the week with a 2-day meeting, but investors may see a little impact from today’s meeting. The central bank has already shown that it can make decisions that can fly US Dollar. Therefore, they do not need to wait for a meeting. Currently, the matter of tension is that the COVID-19 now spread to 1-million people within the United States.
The US hit more than 1-million COVID-19 cases in just over two weeks after it reported 500,000 cases. The outbreak is still not likely to go away from the world quickly.
Overall, easing programs from FED and ECB may increase the demand for gold as a safe-haven asset. However, both central banks may not touch rates, but all policymakers may reaffirm their commitment to keeping economies are afloat.
Will XAU Break Below the $1695 Support Level?
XAU is trading above the $1695 support levels. On intraday, the price is getting support from the Kumo cloud, and the price is on the way to recover higher in the coming days.
Image: Gold 4 Hour Chart
In the 4-hour chart, XAU is residing above $1700 area and trying to push higher from the uptrend line after a consolidation. As per the current price action, any 4-hour bullish close above $1715 may indicate a further bullish pressure with the target of $1750. Alternatively, the bearish price action has some potentiality as the price failed to create a new higher high after reaching $1747 level. Therefore, a bearish daily close below $1695 may indicate a decline in price with the target of $1650 area.
Furthermore, the price is getting minor resistance from the dynamic level of 20 EMA, but the Kijun Sen and Tenkan Sen remains expanding. Therefore, to stay bullish, it is vital to overcome the dynamic resistance and minor static resistance of $1715. In contrast, any bullish close of the 4-hourly candle above $1715 may indicate an upcoming bullish possibility. Besides, the Stochastic Oscillator lines are at the overbought area showing a decline in the price. Therefore, any failure to break above the $1715 level may create bearish interventions in the price.
To conclude, Gold rejected the $1695 support levels and trading above $1700 levels, which indicates that investors may require a solid reason to create a new higher high above the $1715 levels. Therefore, XAU a fundamental boost, possibly from FED, may increase the demand for gold as a safe-haven asset.