Gold (XAU/USD) witnessed technical selling at the long-held support now resistance of $1850 on Thursday, finishing the day with modest losses at around $1835. On Friday, the key $1850 barrier is set to limit XAU/USD bulls amid US stimulus deadlock.
“Brexit and US stimulus deadlock offset the optimism over the covid vaccine progress. The US FDA voted overwhelmingly to recommend the emergency use of Pfizer’s vaccine, although the authorization will take place in the coming days. Meanwhile, the persistent growth in the COVID-19 cases globally remains a cause for the market’s concern ahead of the US PPI and Michigan Consumer Sentiment data.”
“Gold wavers in an ascending triangle formation with a convincing break below the rising trendline support of $1833 to validate the pattern. The bears could then look to test the measured target at $1808.
“The bearish 50-HMA is likely to offer immediate resistance at $1842, above which the $1850 level will get challenged. That level is the confluence of the horizontal 100-HMA and trendline resistance. A daily closing above the $1850 hurdle is needed to negate the near-term bearish bias.”