Bull flag breakout, impending bull cross point to a fresh XAU/USD upswing
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- Gold price is gearing for another run higher, with eyes on levels above $2,000.
- US Dollar clings to recovery gains amidst cautious markets, weaker US Treasury bond yields.
- Daily technical setup suggests more gains for Gold price after a bull flag breakout.
Gold price is trading listlessly so far this Friday, as bulls take a breather after the recent blistering rally. The United States Dollar (USD) is consolidating the previous recovery, awaiting the preliminary release of the US S&P Global Manufacturing and Services PMI data.
United States Dollar makes a comeback ahead of global PMIs
Gold price has entered a phase of upside consolidation just shy of the $2,000 mark, as traders look forward to the preliminary S&P Global business PMIs from the Euro area economies and the United States, in the face of the recent banking sector crisis. Markets continue to stay jittery on concerns looming over the global banking sector, motivating the US Dollar bulls to recover some ground but persistent weakness in the US Treasury bond yields amid the dovish US Federal Reserve (Fed) policy outlook.
FXStreet’s Chief Analyst, Valeria Bednarik, notes, “the Eurozone Manufacturing PMI is foreseen at 49, up from the previous 48.5, while the services index is seen at 52.5 from 52.7 in February. German indexes are expected at 47 and 51, respectively, improving modestly from the previous month’s readings. Finally, both United States indexes are seen below the final February readings, with only the Services PMI holding above the 50 threshold.”
“Dismal figures will come as no surprise, but market players will pay attention to the extent of the setback. Much worse than anticipated figures will probably trigger risk-aversion, with the US Dollar benefiting from profit-taking ahead of the weekend. On the other hand, upbeat figures will boost ongoing confidence and push the Greenback further lower,” Valeria adds.
Even though the data renders support to the beleaguered US Dollar, the path of least resistance for Gold price remains to the upside amid a bullish daily technical setup.
Gold price technical analysis: Daily chart
Gold price finally confirmed a bull flag breakout after closing Thursday above the falling trendline resistance at $1,975.
The doors, therefore, remain open for a test of the yearly high at $2,010 should Gold bulls yield a sustained break of the $2,000 barrier.
The next relevant upside barrier is envisioned at the $2,050 psychological level.
Adding credence to the upside. the 14-day Relative Strength Index (RSI) is trading firmer above the midline, lying just beneath the overbought territory.
Further, the bullish 21-Daily Moving Average (DMA) has pierced through the mildly firm 50 DMA for the upside. A bullish crossover could be validated on a daily closing basis, which will strengthen the bullish momentum in the Gold price.
On the other side, any corrective downside in the Gold price will meet initial support at the $1,980 round level, below which the bull flag resistance-turned-support at $1,967 will be tested.
The last line of defense for Gold buyers is seen at the $1,950 demand area.
- Gold price is gearing for another run higher, with eyes on levels above $2,000.
- US Dollar clings to recovery gains amidst cautious markets, weaker US Treasury bond yields.
- Daily technical setup suggests more gains for Gold price after a bull flag breakout.
Gold price is trading listlessly so far this Friday, as bulls take a breather after the recent blistering rally. The United States Dollar (USD) is consolidating the previous recovery, awaiting the preliminary release of the US S&P Global Manufacturing and Services PMI data.
United States Dollar makes a comeback ahead of global PMIs
Gold price has entered a phase of upside consolidation just shy of the $2,000 mark, as traders look forward to the preliminary S&P Global business PMIs from the Euro area economies and the United States, in the face of the recent banking sector crisis. Markets continue to stay jittery on concerns looming over the global banking sector, motivating the US Dollar bulls to recover some ground but persistent weakness in the US Treasury bond yields amid the dovish US Federal Reserve (Fed) policy outlook.
FXStreet’s Chief Analyst, Valeria Bednarik, notes, “the Eurozone Manufacturing PMI is foreseen at 49, up from the previous 48.5, while the services index is seen at 52.5 from 52.7 in February. German indexes are expected at 47 and 51, respectively, improving modestly from the previous month’s readings. Finally, both United States indexes are seen below the final February readings, with only the Services PMI holding above the 50 threshold.”
“Dismal figures will come as no surprise, but market players will pay attention to the extent of the setback. Much worse than anticipated figures will probably trigger risk-aversion, with the US Dollar benefiting from profit-taking ahead of the weekend. On the other hand, upbeat figures will boost ongoing confidence and push the Greenback further lower,” Valeria adds.
Even though the data renders support to the beleaguered US Dollar, the path of least resistance for Gold price remains to the upside amid a bullish daily technical setup.
Gold price technical analysis: Daily chart
Gold price finally confirmed a bull flag breakout after closing Thursday above the falling trendline resistance at $1,975.
The doors, therefore, remain open for a test of the yearly high at $2,010 should Gold bulls yield a sustained break of the $2,000 barrier.
The next relevant upside barrier is envisioned at the $2,050 psychological level.
Adding credence to the upside. the 14-day Relative Strength Index (RSI) is trading firmer above the midline, lying just beneath the overbought territory.
Further, the bullish 21-Daily Moving Average (DMA) has pierced through the mildly firm 50 DMA for the upside. A bullish crossover could be validated on a daily closing basis, which will strengthen the bullish momentum in the Gold price.
On the other side, any corrective downside in the Gold price will meet initial support at the $1,980 round level, below which the bull flag resistance-turned-support at $1,967 will be tested.
The last line of defense for Gold buyers is seen at the $1,950 demand area.
