Gold prices surged higher on Monday and broke out to fresh highs against the Euro. This came as riskier assets rebounded following news that New York’s hospital discharges were higher than its admittance to hospitals. US yields moved higher on Monday but the dollar remains nearly unchanged on the trading session. The technical breakout of gold versus the euro is likely to drive prices higher even against the greenback.
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Gold prices surged higher on Monday rallying 2.5%. Prices are now poised to test target resistance near the March highs at 1,703. A break of this level would lead to a test of 2012 highs at 1,795. Support is seen near the 10-day moving average at 1,618. Additional support is seen near the 50-day moving average at 1,595.
A short-term trend is now positive. The 10-day moving average has crossed above the 50-day moving average which means that a short-term trend is now in place. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading of the fast stochastic is 89, above the overbought trigger level of 80 which could foreshadow a correction. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram also generated a crossover buy signal, and now the trajectory is moving higher which reflects accelerating positive momentum. The RSI (relative strength index) is moving higher in tandem with price action which reflects accelerating positive momentum.
Gold prices have broken out to fresh 20-year highs against the Euro which is leading the gold move higher against the greenback. This fresh breakout does not have a target that should provide the backdrop for short-covering leading gold prices higher.
This article was originally posted on FX Empire
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