Gold analysis – 4 May 2020
Last week, the major central banks (BOJ, ECB, and FED) did not change their policy but added more liquidity for their QE plan, therefore analysts also do not expect any changes in the BoE and RBA monetary policy meeting this week. In the week ahead, investors and traders will be focused on US employment data, as it is the first trading week of the month and we will have the NFP.
On the Covid-19 front, there are concerns in the markets that the epidemic is going to start new trade war, as President Trump is seeing all his achievements in the past three years diminishing, both in Jobs and financial markets. In his latest interview, on Friday, President Donald Trump said that raising tariffs on China is “certainly an option” as he accused China of mishandling the spread of the COVID-19 pandemic. (Reuters).
While the biggest global economies are starting the reopening of businesses and factories, there are still fears of slow recovery, a second wave of the pandemic, and raised tensions between the US and China, which can also threaten the trade deal.
At the end of the day, Golds bulls love tensions and fears; as long as it keeps rising, they could support Gold.
Gold technical overview – H1 Chart
RSI is at 57 while Parabolic SAR dots are forming under the candles and price is above the OBV trend line. Technical indicators have a bullish signal, however, the low market volume could slow down the bulls’ move. $1704 and $1684 are the key resistance and support levels, and approaching or breaking these levels, will help the movement to find a new trend or confirm more bulls.
Pivot point: 1693.90
Resistance levels: 1717.50 / 1728.90
Support levels: 1682.50 / 1658.90
Today, the expected trading range is between 1682.50 support and 1717.50 resistance.
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