We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • (Weekly Outlook) The Japanese #Yen faced a mixed week against currencies such as the US Dollar, Euro, British Pound and Canadian Dollar. What is ahead for $USDJPY, $EURJPY, $GBPJPY and $CAD/JPY? - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2020/04/04/Japanese-Yen-Weekly-Forecast-USDJPY-EURJPY-GBPJPY-CADJPY.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/Flgbd5b2ag
  • Foreign exchange – or “#forex” – markets often pay close attention to politics and central bank policy. We offer a model for traders to gauge their impact on exchange rates. Get your market insight from @ZabelinDimitri and @CVecchioFX here: https://t.co/FbXc1Awu6a https://t.co/Qbhs4ndgPa
  • Why must financial market traders monitor both monetary and fiscal policy? Find out from @MartinSEssex here: https://t.co/Fkzk88Y5gm https://t.co/AldbSctm9V
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/yF133btXFd https://t.co/Sjnr0iVgAf
  • Upside momentum stalls with the #DAX and #FTSE 100 vulnerable to testing lower levels as the economic backdrop deteriorates further. Get your #equities technical analysis from @JMcQueenFX here: https://t.co/BFIaXTfDcs https://t.co/q0Mso4zWlT
  • RT @iv_technicals: *TRUMP SAYS HE'D USE TARIFFS IF NEEDED TO PROTECT OIL INDUSTRY - BBG #OOTT #WTI $USO
  • After the pattern is composed with the closing of the signal candle, then you can look to the following candle to identify a clear bias and risk points. Learn how to apply this knowledge to a trading strategy here: https://t.co/uh3NwgHBVv https://t.co/yl4KUMNmUh
  • Asia’s vast and growing importance to the world economy is not yet matched by the presence of a currency trading center to rival the established order. Get your update on market drivers in Asia here: https://t.co/r3Ku0p9dw1 https://t.co/CU5vMilpLH
  • - Gold prices may suffer if FOMC minutes spark risk aversion, concerns about liquidity - #XAUUSD could face additional selling pressure if employment data sours sentiment - Ballooning credit risks from distressed corporate debt markets may cap gold’s gains https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/04/04/Gold-Prices-May-Fall-on-FOMC-Minutes-Recession-Credit-Risks.html
  • The bear flag pattern is a popular price pattern used by technical traders within the financial markets to determine trend continuations. Learn how to spot a bear flag pattern here: https://t.co/zg8QzS3ytS https://t.co/A8fvEmmh0K
Gold Price Outlook: XAUUSD Spikes, Snaps Back to Fibonacci Support

Gold Price Outlook: XAUUSD Spikes, Snaps Back to Fibonacci Support

2019-08-26 13:30:00
James Stanley, Strategist
Share:

Gold Price Outlook Talking Points:

Gold Prices Spike at the Open, Snap Back Fades Gains

Last week finished with a bang and it likely came from areas of the market that not many were expecting. Jerome Powell’s Jackson Hole speech did take on a dovish tone, with the FOMC Chair saying that the bank will do what’s needed to continue the expansion. But just a couple hours before he took the stage the ongoing US-China trade war got another ramp of volatility when China announced additional tariffs on US goods. This may have helped to prod that slightly-more-dovish Jerome Powell, but the Fed Chair’s speech is not where matters finished. Later in the day President Trump talked up even more tariffs on China, and that was walked back over the weekend.

Given the weekend events, risk aversion spiked at the open with Gold prices temporarily trading-above the 1555 level. That move has since pulled back with almost the entirety of those gains now given back and price action returning back towards last week’s close.

Gold Price Four-Hour Chart

gold four hour price chart

Chart prepared by James Stanley; Gold on Tradingview

Can Gold Hold the Bid With a Messy Fundamental Backdrop?

Gold prices have been strongly bid for a full year now after bottoming-out around 1160 in August of last year. This topside move has had a few different drivers along the way, with the initial push coming from softening expectations around the Federal Reserve and that hastened through Q1 of 2019. More recently, however, a bit of fear has entered into the equation around the ongoing trade rift with China, perhaps best evidenced earlier this month. That’s when Gold prices softened on the heels of the FOMC rate decision, even as the bank cut rates for the first time in a decade; but a strong bid followed as President Trump announced another round of tariffs on China.

This collectively produces a fairly bright backdrop on the fundamental side of Gold prices. Ongoing trade tensions will likely be met with softer monetary policy out of the Fed; both factors that can further contribute to bullish stances in Gold. =The issue at the moment is in just how strong this theme has been getting priced-in with Gold prices moving to their most overbought state since 2011, right around the time that price action topped-out above the 1900 level. Since those lows last August, Gold prices have gained as much as 34% going out to this morning’s swing-high.

Gold Weekly Price Chart

gold weekly price chart

Chart prepared by James Stanley; Gold on Tradingview

Gold Price Strategy

Given the overbought longer-term backdrop with a fundamental scenario that could continue to lead to further gains, and traders have a couple of options for approaching the topside of Gold at the moment. Breakout potential remains, looking for spikes to fresh highs to carry on. This would be similar to the setup looked at last week in which breakout potential existed at the Fibonacci levels of 1509 up to the 1527 marker.

Alternatively, traders can look pullbacks to support that could re-open the door for defined risk plays. Key for such approaches will be actually confirming that support is actually showing at the level so that stops can be held below those lows; and if prices do continue to break-down, losses could be mitigated, and bullish entries could be re-examined later.

Aggressive support could be sought out around the current level should buyers help to hold the lows here today. This comes in at 1527 and this price provided a bit of resistance on Friday as well as a lower-high two weeks ago. This is the 23.6% Fibonacci retracement of the 1999-2011 major move in Gold. A bit-lower is another Fibonacci level of interest at 1509, as this is the 61.8% marker of the 2012-2015 sell-off. And below that is the zone that helped to hold last week’s lows that runs from the approximate 1492-1496.

Gold Price Two-Hour Chart

gold price two hour chart

Chart prepared by James Stanley; Gold on Tradingview

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.