- KSAU/USD could continue its rise if it stays above the sliding line (fig).
- A new higher high activates further growth.
- US and Canadian figures could change the mood.
The price of gold is trading at $2,028 at the time of writing. The metal appears determined to extend its rally as the US dollar looks exhausted. USD depreciation should help KSAU/USD reach new highs.
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The dollar has shown signs of being overpriced in the short term even as the US has released positive economic data in recent days. Yesterday, jobless claims, building permits and housing starts were better than expected, while retail sales data beat expectations on Tuesday.
Today, the price of gold is also targeting new highs after UK retail sales reported a 3.2% decline versus an estimated 0.5% drop and following a 1.4% rise in the previous reporting period. However, I believe that only the economic data from the US and Canada today should have a big impact and could change the mood.
The Canadian Retail Sales indicator could see a rise of 0.0%, while Core Retail Sales could announce a rise of 0.1%. Furthermore, US Prelim UoM Consumer Sentiment could jump from 69.7 to 69.8 points, while existing home sales are expected to come in at 3.83 million, up from 3.82 million in the previous reporting period.
Technical analysis of the price of gold: A leg up
Technically, KSAU/USD has reached the former high of $2,029 and is trying to take it down. Upward pressure is high after the jump and stabilization above S1 (2,020) and most importantly, beyond the inner glide line of the ascending fork (fig).
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The bias is bullish as long as it is above this broken dynamic resistance. However, only a new higher high, a bounce and a close above $2,032 confirm a continuation to the upside. The weekly pivot point at $2,041 and the midline (ml) are upside targets.
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