Bullish breakout on gold. Gold tried to complete a breakout-pullback pattern on the daily chart, around the 1200 level, but it couldn’t continue falling after yesterday’s session. Today the price of gold breaks above the 1200 level and accelerates its bullish momentum. The breakout comes after the FED’s chairman, Jerome Powell, said that rates will go up slowly. His comments caused the Dollar to retrace to the downside and gold to rally, due to the negative correlation between those two instruments. In case of continuing higher, gold may reach the 55 day EMA at the 1230 level. To the downside, the low at the 1160 level could act as support.
Gold is losing its bullish momentum around the 1209 level, but it it continues rallying, then the 55 day EMA around the 1226 level could act as resistance. To the downside, its closest support is the 1200 level, followed by the low at the 1160 level.
The price of gold stays above the 1200 level after bouncing to the upside from the low at the 1160 level as shown on the weekly chart. Last week was bullish for gold as the US Dollar was retracing to the downside. The current weekly candle is in the shape of a doji, which is an indecision Japanese candlestick pattern. If gold continues rising, the 1227 level could act as resistance. Below the 1200 level, the low at the 1160 level could act as support.
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