Key Highlights
- Gold price formed a solid support near $1,485 and climbed above $1,515 against the US Dollar.
- There was a break above a major bearish trend line at $1,506 on the 4-hours chart of XAU/USD.
- The US Consumer Confidence declined sharply from 134.2 to 125.1 in Sep 2019.
- The US New Home Sales could increase 3.9% in August 2019 (MoM), better than the last -12.8%.
Gold Price Technical Analysis
Earlier this month, gold price started a major downside correction from $1,557 against the US Dollar. It broke many supports before forming a solid support base near $1,485 in the past two weeks.
The 4-hours chart of XAU/USD indicates that the price started a fresh increase from the $1,483 swing low. There was a break above many important resistances near the $1,500 and $1,505 levels.
Moreover, there was a break above a major bearish trend line with resistance near $1,506 on the same chart. It opened the doors for more gains above $1,510 and the 100 simple moving average (4-hours, red).
The price even surpassed the 50% Fib retracement level of the last major decline from the $1,557 high to $1,483 swing low. It seems like the price is back in an uptrend and it could continue to rise.
An immediate resistance is near the $1,540 level, plus the 76.4% Fib retracement level of the last major decline from the $1,557 high to $1,483 swing low. If there is an upside break above $1,540, the price could accelerate towards $1,550 and $1,555.
Conversely, if it fails to surpass $1,540, there could be a downside correction. An initial support is near $1,510 and the 100 simple moving average (4-hours, red). Any further losses might push the price to $1,500.
Fundamentally, the US Consumer Confidence report for Sep 2019 was released by the Conference Board. The market was looking for a minor decline from 135.1 to 134.1.
The actual result was disappointing, as there was a sharp decline in the Consumer Confidence to 125.1. Moreover, the last reading was revised down from 134.2 to 134.1.
The report added:
The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased from 176.0 to 169.0. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined from 106.4 last month to 95.8 this month.
Looking at EUR/USD, the pair is facing a strong resistance near the 1.1080 and 1.1100 levels. On the other hand, GBP/USD remains well supported above the 1.2400 and 1.2380 levels.
Economic Releases to Watch Today
- Non-Monetary Policy ECB Meeting.
- US New Home Sales for August 2019 (MoM) – Forecast +3.9% versus -12.8% previous.
