Gold has turned bearish again this week, breaking below the 1200 handle. The 1H chart shows an expanded flat consolidation around 1187, which gave way to a bearish breakout during the May 28th session.
The 4H chart shows the expanded flat and the subsequent bearish break, which actually still looks like a part of the expanded consolidation if not for the strength of the bearish candle. Most likely this is a bearish continuation breakout as price is trading under the 200- 100-, and 50-hour SMAs and the RSI is holding under 60 for the most part.
However, there was an immediate rebound from 1180 to challenge the bearish continuation scenario. As we we get deep into the May 28 US session, price has so far held below 1190, which keeps the bearish outlook.
The daily chart shows a bearish market that has been consolidating. A break below the current low of 1180 would clear a rising trendline and open up 1170, then the 1143 low on the year, with the 1130 2014-low in sight as well.
However, if price climbs back above 1190, this bearish outlook might be put on hold for the short-term with the 1200 as a key resistance. If price is anchored below 1200, the downside risk would still be in play. However, a break above 1200 opens up a pivot at 1210, as well as well as the 1230-1233 high on the month.
In the 4H chart we can see that the 1200-1205 area involves a previous support and the cluster of moving averages. As we noted, if price can hold under this area, the bearish outlook would still be in play.
GDP to Move USD: Friday’s US GDP data will be key to whether gold will break below the rising trendline seen in the daily chart, or climb back above this 1200-1205 area, so monitor these two levels after tomorrow’s key data point.
Previous Post by Author: Pound Losing Ground after UK Q1 GDP Data