Charts Of The Day: XAU/USD bounces back to give gold bulls hope

Market Analysis / 4 Min Read
Milan Cutkovic / 04 May 2021

Highlights:

  • XAU/USD bounced back off a key support level, which is giving Gold bulls hope
  • Following a longer period of consolidation, the outlook for Silver has turned positive
  • USD/CAD looks oversold in the short-term, but the currency pair remains in a strong downtrend
  • NZD/USD remains one to watch
  • Norwegian Krone benefiting from rising commodity prices

XAU/USD

The Dollar rally quickly lost momentum and the currency reversed its recent gains. XAU/USD bounced back off the key $1759 support level, and this is giving Gold bulls hope that the precious metal could soon reach new highs. Resistance ahead of the $1800 level proved once again to be tough, and Gold failed to clear this hurdle on the third attempt in the last two weeks. Nevertheless, the short-term uptrend remains intact and a clear break above $1800 would then pave the way for a test of the 200 DMA – currently around $1857.

Silver 

Following a longer period of consolidation, the outlook for Silver has turned positive too. The metal cleared the $26.65 resistance level without much difficulty and there is little resistance now until $28.30. The daily RSI is not hinting at overbought conditions yet and the Silver rally might have more room to run. To the downside, traders will be keeping an eye on the $26 support level, as well as the rising trendline from the April low.

USD/CAD

Broad USD weakness and rising risk appetite are making commodity currencies attractive.

USD/CAD looks oversold in the short-term, but the currency pair remains in a strong downtrend and there are no signs that there will be a recovery soon. Imminent resistance is seen at 1.2325, and sellers are likely to return in greater numbers at 1.2380/85. The Canadian Dollar is benefiting from a hawkish Bank of Canada, an improved outlook for the domestic economy and surging commodity prices. 

NZD/USD

NZD/USD is worth keeping an eye on as well. While the currency pair has been consolidating for the past few days, the odds now favor an upside breakout. The Kiwi Dollar could soon have another run towards the 0.7265 resistance level, which is the 61.8% Fibo of the March-April decline. Should NZD/USD clear this obstacle, a continuation of the rally towards at least 0.7360 is likely to follow.

NOK/JPY

The Norwegian Krone is another currency that has been benefiting from rising commodity prices. NOK/JPY remains in a strong uptrend, and traders looking to buy dips will be keeping a close eye on the lower trendline of the ascending channel, as well as the 12.76-87 support zone. To the topside, resistance is seen at 13.36 and the upper trendline.

The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

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