- The bias is bullish as the dollar depreciates against its rivals.
- Removing the 150% line activates more winnings in advance.
- Only a bearish pattern could signal a new selloff.
The price of gold continued its upward trend, boosted by the recent decline in the dollar index. The dollar’s depreciation prompted KSAU/USD buyers to increase prices.
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The yellow metal hit new highs after the release of disappointing economic data in the last trading session. Notably, US industrial production fell 0.6%, beating expectations for a 0.4% increase.
Additionally, the capacity utilization rate fell to 78.9% from 79.5%, and jobless claims rose to 231,000, well above the expected 221,000.
Today brought further developments as UK retail sales disappointed by falling 0.3%, below expectations for a 0.5% rise. In contrast, the final Eurozone CPI and Final Core CPI met expectations, while the current account exceeded them.
Looking ahead, Canada is poised to release RMPI, IPPI and purchases of foreign securities. However, the focus remains on US data, with building permits expected at 1.45 million compared to a forecast of 1.47 million, and housing starts potentially falling to 1.35 million from 1.36 million.
It’s worth noting that better-than-expected data could put downward pressure on KSAU/USD after a strong rally.
Technical analysis of gold price:
From a technical point of view, KSAU/USD showed accelerated growth after successfully retesting the middle line (ml) and breaching the upper middle line (uml). Currently positioned in the demand zone, it faces the 150% Fibonacci line, serving as dynamic resistance. A breach of this upward barrier, along with a negation of the supply zone, signals the potential for further upward momentum.
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The warning line (vl1) stands out as a target worth watching if the current growth rate continues. Conversely, a false break above the 150% Fibonacci line, followed by the formation of a strong bearish pattern within the supply zone, could herald another selloff. As such, close monitoring of these key technical indicators is advised to comprehensively understand potential market movements.
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