Gold is retesting its highly psychological $1100/oz area after Friday's pullback. Gold experienced another leg down despite pops in the EUR/USD and GBP/USD. These two currency pairs are normally positively correlated with gold, so it's interesting that gold isn't behaving according to its usual Dollar correlation. Meanwhile, gold is fighting to hold $1100/oz. Gold did drop below our 2nd tier uptrend line on Friday, a negative development technically since the 2nd tier runs through 2/12 lows, or the $1075/oz . zone. Hence, gold could be in for further weakness over the near-term should the precious metal not overcome some topside technicals quickly. While gold sank below key technical cushions on Friday, the EUR/USD and GBP/USD popped above some important technical barriers. Therefore, it will be interesting to see whether we are witnessed a more lasting shift in correlation. The U.S. will be in focus again today with a thorough data set on the way. However, tomorrow's Fed meeting will likely capture the spotlight since investors will be watching to see whether the central bank shifts its loose monetary policy stance. The EU will also release its ZEW Economic Sentiment data tomorrow, meaning volatility could pick up in the FX markets over the next 24 hours.
Technically speaking, gold faces multiple downtrend lines along with 3/11and 3/12 highs. As for the downside, gold still has multiple uptrend lines serving as technical cushions, highlighted by our 2nd tier which runs through 2/12 lows. Furthermore, the psychological $1100/oz area could continue to have an influence on gold over the near-term.
Present Price: $1104.50/oz
Resistances: $1105.05, $1106.26, $1108.17/oz, $1109.58/oz, $1110.98/oz, $1112.29/ oz
Supports: $1105.05/oz, $1102.82/oz, $1101.73/oz, $1100.35/oz, $1099.05/oz, $1097.74/oz
Psychological: $1100/oz, $1150/oz, March highs and Lows