Gold experienced a sharp sell-off of 1.4% in a single day, meeting our forecasts while Aussie edged lower as RBA left rates unchanged and signalled that there will not be rate hikes anytime soon. Euro and British pound led by factory activity.
XAU/USD – Technical Outlook
The precious metal completed a sharp sell-off on Monday and slipped more than 1.4%. The XAU/USD pair printed the fourth negative consecutive day and reached our suggested target at $1,225 near the 200-day SMA (see our technical analysis here: https://bit.ly/2tDJeNL). The latter level acted as significant support obstacle for the bulls and the price failed to challenge the $1,214 support handle. The descending penetration of the uptrend line gives a signal to traders that the bullish tendency paused. The technical indicators are confirming the recent bearish attitude. The RSI indicator is falling below the 50 level with strong momentum and is near the 30 level as well as the MACD oscillator which is holding below its trigger line.
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