The price of gold extended upside movement on Wednesday, increasing the value of yellow metal to more than $1245 an ounce following the release of some key economic news. The technical bias remains bearish because of a Lower Low in the recent downside wave on the daily timeframe.
Technical Analysis
As of this writing, the precious metal is being traded near $1247 an ounce. A hurdle may be noted around $1260, the horizontal resistance area ahead of $1282, the swing high of March 2016 and then $1300, the psychological number.
On the downside, the yellow metal is likely to find a support near $1244, the horizontal support area ahead of $1236, another major horizontal support and then $1224, the low of April 2016 as demonstrated in the above daily chart. The technical bias will remain bearish as long as the 1303 resistance area is intact.
US Consumer Credit Change
Consumer credit rose by $13.4 billion in April following the largest monthly increase on record in dollar terms during March. Revolving credit accounted for much of the slowdown, rising $1.6 billion after the outsized gain of $10.4 billion in the prior month. Nonrevolving credit also moderated, however, increasing $11.8 billion during the month. Consumer credit data can be volatile on a month-to-month basis, so looking at the three-month moving average can be instructive to see longerterm trends.
Trade Idea
Considering the overall technical and fundamental outlook, buying the precious metal around current levels could be a good strategy in short to medium term.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT
