Over the past three days, from Monday to Wednesday, XAUUSD has exhibited a slight bearish trend, following a series of bullish runs observed in the preceding weeks. Such a pullback is a natural response to extended bullish movements. During this period, global economic data, with the exception of the United States, has yielded mixed results, leading to an overall risk-off sentiment in the market.
On Tuesday, the US economic news revealed higher-than-expected outcomes for "Factory Orders," bolstering the US Dollar's value relative to Gold. Looking ahead to Wednesday, economists have revised their expectations for the trade balance, now anticipating a figure of -68B, compared to the previous -65.5B. This lower in expectations potentially presents a strategic buying opportunity for XAUUSD trading pairs should the outcome either align with these revised expectations or fall below it
From a technical standpoint, several indicators suggest a cautious outlook for XAUUSD. Firstly, the MACD signal line signals bearish sentiment by printing negative values or dipping below the critical 0 line. Moreover, the impending convergence of the 50-day (purple) and 200-day (black) moving averages, known as the "death cross," looms on the horizon. The potential formation of this death cross hinges on the outcome of the trade balance data, particularly if it exceeds expectations.
While the technical indicators do not yet confirm a bearish trend, they certainly don't paint a rosy picture for XAUUSD. Presently, the support zone is firmly situated at 1903-1922, providing a critical level to monitor. In contrast, the resistance zone lingers at 1942-1946, representing a key upper boundary for price movements. Traders should exercise prudence and closely observe these technical signals as they navigate the XAUUSD market.
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