Gold Weakens on Daily Chart


Daily Chart

Further to our previous article, XAUUSD's daily chart has turned bearish. The mid orange moving average has crossed below the longer red moving average (aqua ellipse). This puts the moving averages into a bearish formation. The stochastic is also in the lower quintile, suggesting an underlying bearish momentum. The longer the stochastic maintains this position, the greater the probability for lower prices ahead. If the longer red moving average turns down and angle and separation develops, the precious metal will be trending down.

Past Performance: Past Performance is not an indicator of future results.

Hourly Chart

The short-term hourly time frame is potentially setting up for weakness. The stochastic has already crossed down (blue rectangle). If the short green moving average crosses below the mid orange moving average, it will be negative. In effect, it will put the moving averages into bearish formation. If the stochastic then proceeds to 20 (aqua arrow), the gold price is likely to be under pressure.

Past Performance: Past Performance is not an indicator of future results.

The NFP Print

On Tuesday, XAUUSD was heavily sold down during Fed Chair Powell's testimony in front of the Senate Banking Committee. His testimony was hawkish in tone and nature. It laid down the path for tighter monetary policy; at a faster pace than previously communicated. As long as economic data support this, gold is likely to remain under pressure. The consensus for today's NFP print ranges from 553K to 581k, depending on the source. Given Tuesday's pivot by the Fed, a good number here is likely to add to the precious metal's weekly woes.

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Past Performance: Past Performance is not an indicator of future results.

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Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.


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