Gold Technical Analysis: Forms a strong base near 200-hour SMA
- Gold remains confined in a narrow trading band around $1550 region.
- Dismal headline NFP-led uptick turns out to be rather short-lived.
- The technical set-up warrants some caution for aggressive traders.
Gold edged higher in reaction to dismal US NFP print, albeit lacked any strong follow-through buying and remained well within the previous session's trading range.
The precious metal has been oscillating in a narrow band over the past 24-hours or so and trying to form a strong base near 200-hour SMA, around the $1550 region.
This is closely followed by support marked by 50% Fibonacci level of the $1470-$1611 positive move, which if broken might seen as a key trigger for bearish traders.
Below the mentioned support, the commodity is likely to accelerate the slide further towards testing its next major support near 61.8% Fibo., around the $1427-26 region.
Oscillators on hourly charts have again started drifting in the negative territory but maintained their bullish bias on the daily chart, warranting some caution for aggressive traders.
Hence, it will be prudent to wait for some strong follow-through selling before confirming that the commodity has already topped out and positioning for any further decline.
On the upside, immediate resistance is pegged near the $1560 region (38.2% Fibo. level), above which the momentum could get extended towards the $1572 horizontal resistance.
Gold 1-hourly chart