Technical analysis of XAUUSD

Gold is close to its fortnightly low this afternoon GMT as American treasury yields remain comparatively high and the dollar continues to post gains against most major currencies. This technical analysis of XAUUSD looks at the daily chart of gold plus futures and annual futures.

The clear high resistance here is the latest high around $1,960 which coincides with the 61.8% weekly Fibonacci retracement area. Low support is around $1,775, the area of the latest low, but the psychological area of $1,800 will probably be more important in the runup to tomorrow’s non-farm payrolls.

Technical indicators on XAUUSD D1

Moving averages give a strong sell signal, with the 50, 100 and 200 SMAs successively below slower lines and above the price. The 100 SMA golden crossed the 200 last week. Bunching of all three moving averages means that the value area around $1,863 to $1,878 is in view as a resistance over the next few days.

There is currently no signal of saturation from either Bollinger Bands (50, 0, 2) or the slow stochastic (15, 5, 5). The latter at about 48 is very close to neutral. Volume meanwhile has been dominated by selling so far this week.

Price action and Fibonacci

Several long wicks around the three moving averages suggest that demand for buying remains fairly low. Nevertheless, there is no clear indication at the moment of an extension downward: the latest fundamental movements in December were upward. A doji around $1,800 is an obvious signal sought by potential buyers, but with the NFP tomorrow we can reasonably expect volatility to pick up into the end of the week.

There seems to have been a decisive break below the 23.6% weekly Fibonacci retracement area and the 38.2% zone of the monthly Fibonacci fan. The next clear support from Fibonacci is the latest low as noted above, but positive sentiment on gold after tomorrow’s data might bring 38.2% around $1,885 back into view.

Futures on gold

This four-hour chart of futures on gold (COMEX, continuous with current contract at front) reflects the situation for the spot CFD quite closely. The main difference we can see is that spikes in both buying and selling volume have been more significant, suggesting a ‘battleground’ between buyers and sellers around recent prices. Tomorrow’s NFP could be an important catalyst for a clear breakout on higher timeframes.

Annual futures on gold

Annual futures on gold are in the process of reconfiguring downward but the contango remains. About 1% is familiar from last month. Volume though remains generally very low except for April’s contract. If activity picks up next week, there might be a clearer signal here.