Technical Analysis

Gold – XAU/USD Analysis - April 27, 2021

By LonghornFX Technical Analysis
Apr 27, 20214 min

Choppy Session in Play!

Gold prices were closed at $1779.90 after placing a high of $1783.10 and a low of $1768.40. After declining for two consecutive days, gold prices rebounded and recovered little losses from the previous day on Monday. Soft U.S. dollar ahead of the Federal Reserve policy meeting this week pushed the yellow metal prices higher on Monday. The U.S. Dollar Index (DXY) that measures the greenback's value against the basket of six major currencies remained flat throughout Monday.

Investors were awaiting the outcome of the Federal Reserve's two-day monetary policy meeting that will end on Wednesday. They were also looking forward to President Joe Biden's speech to Congress and the economic data on first-quarter U.S. GDP that is scheduled to release this week. All these events will likely guide the next price move in gold, which kept the gold gains under consolidation on Monday.

At 17:30 GMT, Core Durable Goods Orders for March remained flat at 1.6% on the data front. Durable Goods Orders in March declined to 0.5% against the forecasted 2.5% and weighed on the U.S. dollar that added further gains in yellow metal prices. The emerging risk-off market sentiment also supported gold prices as the global tally for coronavirus infections reached above 147 million on Monday, with the death toll rising to 3.11 million. India, which was facing more new infections of COVID-19 than any other country globally, was sliding into a devastating crisis due to the second wave of coronavirus in the region.

Hospitals were unbearably full; oxygen supply was deficient. People were dying in line to see doctors and evidence that the actual death toll was far higher than officially reported in India. Each day, the government was reporting more than 300,000 new infections, which is a world record. This raised concerns over the economic recovery of the country. Fears of the spread of this virus also surged that increased safe-haven appeal in the market and supported precious metal gains on Monday.

Furthermore, the risk-off market sentiment was supported by the comments from Chinese Foreign Minister Wang Yi, who said that the differences between the U.S. and China were continuing as Washington was yet t find the right way to deal with Beijing while holding on to misunderstandings. He also warned that playing the Taiwan card was playing-with-fire, and the U.S. must not do it. This warning could escalate the ongoing tensions between both countries, and these fears added to the demand for safe-haven appeal that ultimately supported the yellow metal prices on Monday.

On Wednesday, President Joe Biden will speak before Congress, and investors are keenly waiting for it. After 99 days in office, Biden is expected to outline his ambitious plans designed to rebuild crumbling infrastructure, boost the economy, and offer more significant financial support to American families.

Gold Intraday Technical Level

Support Resistance

1773.26 1776.41

1771.88 1778.18

1770.11 1779.56

Pivot Point: 1775.03

Gold - XAU/USD - Technical Outlook 

The technical side of the precious metal gold hasn't changed a lot as it continues trading with a slight bullish recovery at $1,780 level, having supported at 1,773 level. The precious metal violated the upward channel on the hourly timeframe on Friday, leading the gold price towards a 1,773 support level. Currently, gold is trading at 1,781 level and heading north to complete 50% Fibonacci retracement at 1,783 level. Next resistance stays at 61.8% Fibonacci retracement level of 1,786. It's interesting to know that the same level is also extended by 50 periods EMA and previously violated channel upward; thus, this level will be a substantial hurdle for gold bulls. All the best!


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