- XAU/USD is bullish after taking out strong resistance levels.
- Breaking above the 61.8% retracement level signaled upside reversal.
- The US inflation should bring sharp movements today.
The gold price extended its upwards movement, trading at 1912 right below new higher high of 1914.
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The bias is bullish, further rise has a high probability as the USD is bearish in the short term.
Fundamentally, XAU/USD jumped higher after the US Unemployment Rate increased unexpectedly to 3.6% from 3.4%, while Average Hourly Earnings rose by 0.2% less versus the 0.3% growth expected and compared to the 0.3% growth registered in January. Moreover, the SVB collapse helped the yellow metal to approach and new highs.
Today, the fundamentals should move the price. The US inflation data is seen as a high-impact event. The Consumer Price Index m/m is expected to report a 0.4% growth in February versus the 0.5% growth in January, while Core CPI m/m could register a 0.4% growth again.
In addition, the CPI y/y could be reported lower at 6.0% versus the 6.4% growth in the previous reporting period.
Tomorrow, the US PPI, Core PPI, Retail Sales, and Core Retail Sales data could shake the markets.
On Thursday, the ECB is expected to increase its Main Refinancing Rate from 3.00% to 3.50%.
Gold Price Technical Analysis: 1,914 As Key Resistance
Technically, the XAU/USD resumed its upwards movement after taking out the upper median line (uml), R1 of 1,888, and the 1,890 upside obstacles.
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Now, it has climbed as high as 1,914 where it has found resistance. Breaking above the 61.8% (1,900) retracement level signaled an upside reversal.
Still, after its strong rally, the price could come back to retest the broken levels before extending its growth. Gold failed to stay above the weekly R2 (1,909) signaling exhausted buyers.
Consolidation above the 61.8% and above the upper median line (uml) may announce new upwards momentum. False breakdowns below the support levels should bring new long opportunities.
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