Today’s upside on the greenback has helped to send the XAUUSD pair lower on the day. The pickup in demand for the greenback drove selling this Friday, sending gold prices down from the two-week tops posted yesterday.
However, the downside appears to have been limited by a slight drop in bond yields and a pullback in the stock markets. This stock market pullback follows a slight souring of risk sentiment globally. Also, a partial lockdown in Beijing has reignited concerns of the coronavirus spread. This situation has impacted investor sentiment.
Gold price is 1.4% lower at the time of writing.
Technical Levels to Watch
Gold price on the XAUUSD daily chart has faced firm rejection at the upper channel boundary and the 50-EMA line. This has set off a further selloff, with an evening star pattern set to be completed by the active candle. This candle has violated the 185.78 support but requires confirmation of the break down of this area. If this confirmation comes from a second candle close following today’s candle, then gold price bears may target the 1821.55 support. Further downside moves could bring 1800.34 and 1788.90 into the picture.
On the flip side, failure to confirm the breakdown of 1850.78 may allow the bulls to make another charge at 1869.39. A breakout above this level also breaks the channel to the upside. This scenario opens the door towards 1881.99 and 1900.76, in that order. 1918.68 and 1940.15 are additional targets to the north.
Gold Price (XAUUSD); Daily Chart