Last week, after a long consolidation, Gold finished the week on a strong note as the price rallied into the weekend setting a new all-time high. As previously mentioned, the market should remain supported as we head into the easing cycle, but in the short term we might see pullbacks if the US data continues to come out strong as that would likely delay the rate cuts. Watch out for this week as we get many key economic data that could put the price under pressure in case we get strong figures.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold last week surged into the weekend extending the rally into a new all-time high. The price got a bit overstretched as depicted by the distance from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next move. In this case, the pullback would come around the trendline where we can find the red 21 moving average for confluence. That’s where we can expect the buyers to buy the dip, while the sellers will look for a break lower to target new lows.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the latest leg higher diverged with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we might get a pullback into the previous all-time high where we can find the 38.2% Fibonacci retracement level for confluence. The sellers, on the other hand, will want to see the price breaking lower to position for a break below the trendline with a better risk to reward setup.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have another minor trendline where the buyers might lean onto as they will also find the confluence of the red 21 moving average. Traders might want to split their position in half as the price can bounce from either level. The sellers, on the other hand, should pile in at every break lower to target new lower lows.
Upcoming Events
This week we get the release of many key economic data. We begin today with the US ISM Manufacturing PMI. Tomorrow, we have the US Job Openings. On Wednesday, we get the US ADP and the US ISM Services PMI data. On Thursday, we will see the latest US Jobless Claims figures, while on Friday we conclude with the US NFP report. Strong data is likely to weigh on Gold, while weak figures should give it a boost.