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Gold inched lower on Monday, decreasing the price of yellow metal to less than $1275.00 an ounce ahead of the US Manufacturing PMI news. The technical bias remains bullish because of a higher low in the recent downside move.
Technical Analysis
As of this writing, the precious metal is being traded near $1263 an ounce. A support may be noted around $1261, an immediate trendline support ahead of $1259, the low of recent downside move and then $1250, a key horizontal support as well as psychological number.
On the upside, a hurdle can be noted near $1269, the 50% fib level ahead of $1279, the trendline resistance area as demonstrated with red color in the given above chart. A break and hourly closing above the red trendline shall trigger renewed buying interest, validating a rally towards the $1300 resistance zone. The technical bias shall remain bullish as long as the $1259 support area is intact.
How Gold Reacted on Past Manufacturing PMI Releases?
Gold didn’t show any noticeable volatility after the release of last manufacturing Purchasing Managers Index report on 4 March 2017 because the actual reading was in line with the average projections of economists i.e. 57.0 points vs 57.2 points.
The yellow metal however fell by around $6 after the release of February’s manufacturing PMI report. The actual outcome was 57.7 as compared to the forecast of 56.0 points.
Trade Idea
Considering the overall technical and fundamental outlook, selling the precious metal around current levels appears to be a good strategy in short to medium term.
What Assets to Trade?
In addition to Gold, trading EUR/USD, GBP/USD, USD/CHF, NZD/USD and AUD/USD can also be a good strategy as the aforementioned pairs are highly reactive to the US Manufecturing PMI report.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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