At $1,852, the gold price has retreated further after moving into the 50% mean reversion zone of the hourly bullish instinct identified in earlier tra
At $1,852, the gold price has retreated further after moving into the 50% mean reversion zone of the hourly bullish instinct identified in earlier trade, as shown in the technical analysis below. The US dollar has been on the offensive since mid-week and has remained strong in Asia, rising in the DXY index’s basket of currencies.
The US dollar index rose on Wednesday, reversing earlier losses as investors exited stocks at the same time as the US 10-year auction yielded 3.03 percent, up from 2.943 percent in the previous auction. Furthermore, the dollar rose to a new two-decade high against the yen, as the Bank of Japan continues to remain one of the few global central banks to preserve a dovish stance. We’ve seen a successive rally in US yields, with the 10-year now trading above 3%, continuing to support the greenback.
XAU/USD
GOLD had previously been supported for its safe-haven qualities following OECD warnings that the world would pay a high price for the Ukraine war. It reduced its forecast for global growth this year to 3% from 4.5 percent in December. This comes after the World Bank revised its growth forecast earlier this week. “Gold gave up some gains late in the session as the USD strengthened,” ANZ Bank analysts observed.
The European Central Bank will be the focus of the day ahead before traders prepare for US inflation data on Friday.
Gold Technical Outlook
Gold price managed to surpass and hold above the 1850 level, which supports the continuation of the bullish trend scenario, organized within the bullish channel that appears on the chart, waiting for a positive motive to push the price towards our main expected target of 1890.
Holding above 1838.10 is critical to maintaining the bullish trend, as breaking it will force the price to resume the main bearish wave and head towards negative targets starting at 1815 and extending to 1780.25. Today’s trading range is expected to be between 1830 support and 1870 resistance. Good luck!
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