23 Feb 2015
Gold might see a brief reversal – FXStreet
FXStreet (Barcelona) - According to FXStreet Editor and Analyst, Dhwani Mehta, XAU/USD technicals suggest that the pair might see a brief reversal, expecting a rebound on short-covering as the pair trades closer to the key support at 1200 levels.
Key Quotes
“Gold prices in terms of US dollar (XAU/USD) ended the week lower on Friday at 1201.77, bouncing off lows under 1200 levels on diminishing safe-haven demand after Greece sought an interim four month extension for its debt repayment, avoiding a probable default.”
“The pair trades now at 1203.09, supported above the crucial trend line support at 1200 levels.”
“The pair may rebound on a short-covering rally after the recent weakness. The daily RSI at 37.67 levels has ticked up slightly indicating a likelihood of a brief reversal.”
“However, the upside may remain capped by 5-DMA located at 1207.32 levels as renewed optimism and re-emergence of risk-on trades is likely to erode gold’s appeal as an alternative asset.”
“A break above 5-DMA, the pair is likely to storm its way through and test 100-DMA placed at 1216.45 levels.”
“To the downside, a break below 1200 levels, the pair may retest previous lows at 1198 levels. Further below that, selling pressure may intensify dragging the pair to test next support at 1182 levels.”
Key Quotes
“Gold prices in terms of US dollar (XAU/USD) ended the week lower on Friday at 1201.77, bouncing off lows under 1200 levels on diminishing safe-haven demand after Greece sought an interim four month extension for its debt repayment, avoiding a probable default.”
“The pair trades now at 1203.09, supported above the crucial trend line support at 1200 levels.”
“The pair may rebound on a short-covering rally after the recent weakness. The daily RSI at 37.67 levels has ticked up slightly indicating a likelihood of a brief reversal.”
“However, the upside may remain capped by 5-DMA located at 1207.32 levels as renewed optimism and re-emergence of risk-on trades is likely to erode gold’s appeal as an alternative asset.”
“A break above 5-DMA, the pair is likely to storm its way through and test 100-DMA placed at 1216.45 levels.”
“To the downside, a break below 1200 levels, the pair may retest previous lows at 1198 levels. Further below that, selling pressure may intensify dragging the pair to test next support at 1182 levels.”