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Charts of the Week: Gold bounces off key support; can the Pound extend the rally?

Market Analysis /
Milan Cutkovic / 28 Aug 2019

Gold managed to bounce a key support area between $1527 and $1535, which is giving bulls confidence that the rally might continue in the short-term. Market sentiment appears to be in favor of the precious metal, with uncertainty around the trade war between the US and China still weighing on the stock market. Key resistance is now seen at $1555, followed by the psychological resistance level at $1600.

XAUUSD
XAUUSD

Meanwhile, the Pound has slightly extended its gains. The recovery rally remains fragile, and could be reversed anytime with a new Brexit announcement. However, as GBP short positioning looks extended, there is the risk of a potential short squeeze. The key area to watch lies between $1.2380 and $1.2430 - a clear break above could cause more GBP bears to give up their positions and add to bullish momentum.

GBPUSD
GBPUSD

In the US500, all eyes are on the 200 DMA. The line has acted as a major support level three times in the past one month of trading, and a clear break below could be seen as a sign that bears are back in control. To the topside, resistance is seen at the 21 DMA around 2900 points, followed by 2940.

US500
US500

The GER30 continues to consolidate in tough market conditions. Fears about a recession in Germany are growing, and it is the hope about further monetary policy easing by the ECB and an economic package by the German government that is keeping the index supported. Bulls are eyeing the 11.855 points as major obstacle, while bears are focused on 11.268 points as key level that needs to go for the sell-off to resume.

GER30
GER30

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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