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Gold Price Rallies To New 2020 High, Primed For More Gains

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Technical analysis of Forex market

Key Highlights

  • Gold price started a strong rise from the $1,565 support area against the US Dollar.
  • A key bullish trend line is forming with support near $1,578 on the 4-hours chart of XAU/USD.
  • The NY Empire State Manufacturing Index increased from 4.8 to 12.9 in Feb 2020.
  • The US Producer Price Index could rise 0.1% in Jan 2020 (MoM).

Gold Price Technical Analysis

After forming a support base above $1,565, gold price started a fresh increase against the US Dollar. The price climbed higher steadily above the $1,580 and $1,590 resistance levels.

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The 4-hours chart of XAU/USD indicates that the price gained bullish momentum after it broke the $1,576 level, and settled nicely above both the 100 simple moving average (red, 4-hours) and the 200 simple moving average (4-hours, green).

Moreover, the price climbed above the 76.4% Fib retracement level of the last key decline from the $1,593 swing high to $1,547 swing low.

It has opened the doors for more gains above the $1,595 and $1,600 levels in the near term. Recently, the price traded close to the main target for the bulls near the $1,605 level. It coincides with the 1.236 Fib extension level of the last key decline from the $1,593 swing high to $1,547 swing low.

Any further gains could lead the price towards the $1,620 level. Conversely, there is a risk of a downside correction below the $1,585 level.

On the downside, there are many supports near the $1,582 and $1,580 levels. Besides, there is a key bullish trend line forming with support near $1,578 on the 4-hours chart of XAU/USD.

Overall, gold price is back in a bullish zone, and it could continue to rise above $1,600. Looking at EUR/USD, there were additional losses below 1.0840, while GBP/USD remained well bid above 1.2950.

Economic Releases to Watch Today

  • UK Consumer Price Index Jan 2020 (YoY) – Forecast +1.6%, versus +1.3% previous.
  • UK Core Consumer Price Index Jan 2020 (YoY) – Forecast +1.5%, versus +1.4% previous.
  • US Producer Price Index Jan 2020 (MoM) – Forecast +0.1%, versus +0.2% previous.
  • Canadian Consumer Price Index Jan 2020 (MoM) – Forecast +0.2%, versus 0% previous.
  • Canadian Consumer Price Index Jan 2020 (YoY) – Forecast +2.3%, versus +2.2% previous.