- Rising tensions between US and China send Gold to higher levels.
- The 200 and 55 moving averages provided some support as the market tested lower.
XAU/USD 1-hour chart
Gold has had a bullish start to the week after China said they may halt soybean and pork purchases from the US (according to sources). This latest move will surely infuriate the US President to recently stripped Hong Kong’s special status and confirmed they will now be subject to tariffs.
The chart below shows the extent of the move higher. As the market headed towards the lows of the session the XAU/USD pair bounced off the 200 and 55 moving averages to push higher. There has also been a bullish cross as the 55 Exponential Moving Average crossed the 200 Simple Moving Average to the upside.
Looking closer at the indicators, the MACD has also had a bullish cross of the signal lines. The histogram, however, is still under the mid-point which indicates this could just be a retracement.
The main feature in the chart is the Fibonacci retracement. Although most of the major Fibs have been taken out, the key 76.4% remains intact. The 76.4% is often used by Elliott Wave analysts for the 1-2 wave count and until that level is broken there will always be the question mark of this just being a small retracement.
Longer-term this chart is still a very bullish one but it could be a good confirmation signal if USD 1750 per troy ounce was broken.
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Additional levels
