Gold breaks above 2,340.00

Source: Dukascopy Bank SA


The price for gold was facing the resistance of the 2,340.00 level and continued to fail at all attempts to reach above it. Meanwhile, the 100-hour simple moving average was acting as support. On the daily candle chart, there was another squeeze going on. However, the technical chart was just representing the fundamentals. The markets were waiting for what the head of the US Federal Reserve will say at an event in Portugal.

In general, Jerome Powell stated on Tuesday that the Fed needs more data before cutting interest rates. On Wednesday, various US data sets were released either below expectations or at forecast. This caused the drop of the USD. The price for gold surged not due to higher demand, but due to lower value of the underlying currency.

Meanwhile, a couple of aspects were spotted on Thursday. First of all, the 2.350.00 mark acted as both resistance and afterwards as support. Secondly, the metal has recovered in a channel up pattern.

A continuation of the surge of the price could face resistance in the 2,370.00 level, which was almost reached in late June. Higher above, either the upper trend line of the pattern will slow down the metal or the 2,400.00 mark.

On the other hand, a decline is set to find support in the 2,350.00 level and the approaching 50-hour simple moving average. Further below, there is a cluster of levels that could turn into support. Namely, take into account the 2,340.00 level, the 100-hour simple moving average and the lower trend line of the channel up.
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