GOLD → A reversal set-up and retest 1954. Ahead of the news

26 Mei 2023

Gold breaks support 1954. Exactly what we've been preparing for for days is happening. The price updates the low to 1936. As the session opens on Friday, the market is buying back the drop. What should we expect from the price on Friday?

The important news will be published today, which will give us the insight about the inflation and about the further actions and the mood of the US Federal Reserve.



Technical analysis:
We see a breakdown of the support of the 1954 range and a decline in the price to the level of 1936 within the downtrend.
On Friday, after the opening of the session, the price forms a retest of the previously broken line and at the moment the price is in the risk zone. If the consolidation near the level continues, all attention will be on the news. Negative news for the dollar will push the price of gold and it could break the nearest resistance. If the news is positive for the dollar, then gold will go down to 1936 and even 1920.
On the monthly timeframe (the chart below left), we see a false-break and the beginning of a correction. A bearish candlestick is formed after the formation of a pin bar. A strong set-up for a reversal.



In the U.S., the core PCE index, the Fed's preferred measure of inflation, will be released. April PCE inflation is expected to be unchanged month-over-month at 0.3%.
Analysts are eyeballing a 4.6% year-over-year increase, while the Fed is looking to bring that figure below its target of 2%.

U.S. Core Durable Goods Orders MoM - Analysts expect the index to decline, which could have a negative impact on the dollar
The Core Personal Consumption Expenditure (PCE) - It is a key way to measure changes in purchasing trends and inflation - analysts believe the index will remain unchanged

Regards R. Linda!

26 Mei 2023

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