Gold inched higher on Wednesday, increasing the price to more than $1320 an ounce. However, the precious metal remains vulnerable after a major bearish breakout earlier this week. The technical bias already remains bearish because of a Lower High in the recent upside rally.
Technical Analysis
As of this writing, the yellow metal is being traded around $1321. A hurdle can be noted near $1330, the trendline resistance area as demonstrated in the given below daily chart. A break and daily closing above the $1330 resistance shall open doors to $1352, the swing high of the recent upside rally.
On the downside, the precious metal is likely to find a support around $1313, the intraday low of today ahead of $1301, the confluence of the psychological number as well as the swing low of the latest major downside move. The technical bias will remain bearish as long as the $1352 resistance area is intact.
US Budget Deficit
The U.S. government posted a $107 billion budget deficit in August, a 66 percent increase from the same month last year, the Treasury Department said on Tuesday. This is compared to a deficit of $64 billion in August 2015, according to Treasury’s monthly budget statement. Analysts polled by Reuters had expected a $108 billion deficit for last month. When accounting for calendar adjustments, August would have shown a $118 billion deficit compared with an adjusted $107 billion deficit in the same month in 2015. The fiscal year-to-date deficit was $621 billion through August, 17 percent up from a $530 billion deficit at the same time last year. There were no calendar adjustments.
Trade Idea
Considering the overall technical and fundamental outlook, selling the precious metal around $1330 resistance 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
