Although the candlestick pattern shows sellers in charge near the end of the trading session, the pattern doesn’t trigger until there is a drop below today’s low. Nonetheless, today’s price action is short-term bearish since it follows the breakout of a long-term pattern. Rather than seeing interest increase following the breakout, the candle pattern shows demand dissipating. In other words, the bullish signal was not confirmed, and it is therefore the breakout is subject to failure.
Initial Strength Turns Bearish
The breakout showed strength initially as the 38.2% Fibonacci retracement at $4.77 of the full downtrend that began from the 2022 peak was exceeded without hesitation. Subsequently, resistance was seen just below the next higher potential resistance zone defined by a November 2018 peak at $4.93 and a 78.6% target from a rising ABCD pattern (purple) at $4.97.
The ABCD pattern looks for price symmetry or a harmonic relationship between the second leg up (CD) and the first upswing (AB). Typically, a 100% relationship identifies a potentially key pivot level. That is where the price gains between the two swings are similar. Also, Fibonacci relationships are used to provide other potential pivots. The 78.6% level deserves attention today given the bearish reaction following the day’s high.
Key Support at 20-Day MA
It looks like the spike high occurred due to an order imbalance shortly after the opening of Monday’s session, as it largely occurred within one-minute. A bearish pullback began immediately after the high was reached. This might mean that the failed breakout has less of a lagging effect than it might otherwise if demand was stronger initially. Nonetheless, key support remains the 20-Day MA, which is now at $4.04.
For a look at all of today’s economic events, check out our economic calendar.
The United States will publish February Consumer Price Index figures this week.
The Bank of Canada will announce its decision on monetary policy next Wednesday.
XAU/USD turned bearish in the near term, could extend its slide in the upcoming sessions.
Spot Gold trades with a softer tone on Monday, piercing the $2,900 mark during American trading hours, albeit confined to familiar levels for a fifth consecutive day. The US Dollar (USD) found near-term demand despite a risk-averse environment. Global stock markets trade in the red at the beginning of the week, maintaining the focus on United States (US) President Donald Trump’s trade war.
The absence of relevant macroeconomic news fueled sentiment-related trading, albeit prevalent demand for safety kept XAU/USD between a rock and a hard place. Later in the week, the US will publish February Consumer Price Index (CPI) figures, with inflation foreseen easing modestly from January levels but still holding above the Federal Reserve’s (Fed) 2% goal.
Other than that, the Bank of Canada (BoC) will announce its decision on monetary policy on Wednesday. The BoC is widely anticipated to trim interest rates by 25 basis points (bps), to 2.75%, moving one step closer to the neutral rate.
XAU/USD short-term technical outlook
From a technical point of view, the daily chart for XAU/USD shows the bright metal remains below a now flat 20 Simple Moving Average (SMA), providing dynamic resistance at around $2,910.00. The longer moving averages keep heading north far below the current level, suggesting bulls maintain control in the long run. Technical indicators, in the meantime, turned lower at around their midlines, suggesting the pair may extend its corrective decline before finding fresh buying interest.
In the near term, and according to the 4-hour chart, the XAU/USD pair is at risk of extending its slide. Converging 20 and 100 SMAs provide resistance in the $2,910 region, while a bullish 200 SMA hovers at around $2,867, providing support. Finally, technical indicators remain within negative levels, although with uneven strength. Still, additional declines are likely on a break below $2,881.80, March 4 intraday low.
Under normal circumstances, if you had told me natural gas was trading at $4.62 in the middle of March, I would have been probably somebody who would ask you, are we in a war? Well, it turns out we are and it turns out that the sides fighting each other, although one be a proxy, are still doing business. So, there you go.
I do think eventually we will sell off quite drastically. Like I said, I’ve been on the sidelines for a while now. I’m just waiting for the signal. I just haven’t had it. There’s been a couple of attempts at breaking natural gas down. We just haven’t seen it successful yet, but to come in and buy after this type of move, especially those who got in at $4.88, later in the same day, they’re getting exactly what they deserve for chasing.
Again, when you look at this from a historical standpoint, this is a pretty extended move, and therefore, I think you have to probably look at this through the prism of a market that’s just really stretching into an area that could cause a lot of resistance. But we’ll just have to wait and see. I prefer shorting. I just don’t have the price action to confirm that. So, I’m on the sidelines.
For a look at all of today’s economic events, check out our economic calendar.
The EURJPY pair kept its stability below the MA55 at 160.90 on last Friday, to continue forming solid obstacle against resuming the bullish attack and notice forming sideways trades by settling near 160.00.
We remind you that the stability of the additional support 158.85 allows us to wait to gather the required positive momentum to surpass the current obstacle and target new positive stations that start at 161.65 and 162.00, while facing strong negative pressures and crawling below the additional support will force it to suffer big losses that might extend towards 158.30 followed by reaching the next support at 157.30.
The expected trading range for today is between 159.40 and 160.90
Silver price shows sideways trades since morning, and as long as the price is above 32.25$, our bullish overview will remain valid and active for today, supported by the EMA50 that carries the price from below, reminding you that our targets begin at 32.86$ and extend to 33.35$ after breaching the previous level.
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The EURNZD price formed strong bullish rally on last Friday to surpass the bullish channel’s resistance line at 1.8880, achieving big gains by reaching 1.9050, while the current sideways fluctuation is caused by stochastic attempt to exit the overbought areas, to keep waiting to gather the additional positive momentum soon followed by starting to target new positive stations that might extend towards 1.9090 followed by reaching 1.230.
Note that declining below the breached resistance will postpone the bullish attack for now to start activating the correctional bearish track before reaching the suggested targets.
The expected trading range for today is between 1.8900 and 1.9100
Despite copper price consolidation within the bullish channel, the stability of 4.8100$ barrier continues to hinder the attempts to resume the bullish attack, to notice providing negative rebound towards 4.6200$ now.
We expect to get more mixed trades now, noting that it is important to hold above the additional support 4.5400$ to manage to gather the positive momentum and attack the mentioned barrier first, while surpassing it will push the price to achieve new gains that might extend towards 4.8800$ and 5.000$.
The expected trading range for today is between 4.5500$ and 4.7700$
Gold price treads water above $2,900 as the US CPI inflation week kicks off.
The US Dollar stays weak amid tariff war-led economic concerns and falling US Treasury yields.
Gold price flirts with 21-day SMA at $2,911 support whilst daily RSI stays bullish.
Gold price is extending its range-play above $2,900 starting a new week on Monday, looking to defend the critical support line near $2,910.
Gold price keeps eyes on Trump’s tariffs, geopolitics
Despite registering a weekly gain last week, Gold price struggles to gain upside traction early Monday. Gold buyers stay cautious amid looming US President Donald Trump’s tariffs on Canada and Mexico after the recent back-and-forth and ahead of this week’s US JOLTS Job Openings and Consumer Price Index (CPI) data.
President Trump issued a fresh tariff threat on Canadian lumber on Friday, noting that it may or may not come today, or on Monday, or on Tuesday. This statement came after the Trump administration temporarily waived tariffs on all USMCA-associated goods and reaffirmed that reciprocal tariffs will take effect in April.
On Sunday, Trump said that they are “looking at a lot of things with respect to tariffs on Russia.
Besides impending tariffs, geopolitical developments will also play a pivotal role this week, especially after the US President said that the administration has discussed lifting an intelligence pause on Ukraine. “Ukraine will sign the minerals deal, but I want them to want peace… they haven’t shown it to the extent they should,” Trump added.
Heightened uncertainty around tariffs and the Ukraine peace deal intensifies concerns over a potential US stagflation, especially after Friday’s February labor market report. The US economy added 151,000 jobs in February, compared with an expected rise of 160,000 and a previous downward revision of 125,000. Meanwhile, the Unemployment Rate climbed to 4.1% versus expectations of 4%. The Labor Force Participation Rate ticked a tad lower to 62.4% in the same period from January’s 62.6%.
The US Dollar lost roughly 3% of its value against its major currency rivals last week amid economic slowdown fears. This lifted bets for more Federal Reserve (Fed) interest rate cuts this year and kept the Gold price downside cushioned. According to LSEG Fed interest rate probabilities, markets are currently pricing 76 basis points (bps) of Fed rate cuts by year-end, starting in June.
However, Gold buyers failed to find any fresh impetus for a sustained upside as Fed Chair Jerome Powell stated on Friday that the US central bank would take a cautious approach to monetary policy easing, adding that the economy currently “continues to be in a good place”.
Looking ahead, Gold price remains a ‘buy-the-dips’ trade as it is the most sought-after store of value and a hedge against inflationary pressures. China continued its Gold purchases for the fourth consecutive month in February, according to the People’s Bank of China data, lending support to yellow metal.
Meanwhile, traders digest the latest China’s inflation data showing that the February CPI fell into negative territory for the first time since January last year, declining by 0.7% year-over-year (YoY.) China’s CPI in February fell 0.2% on a monthly basis, compared to a rise of 0.7% in January.
It’s worth mentioning that Chinese tariffs, announced last week, of up to 15% on a raft of US farm products come into effect on Monday.
Gold price technical analysis: Daily chart
The short-term technical outlook for Gold price remains more or less the same as long as it defends the 21-day Simple Moving Average (SMA) of $2,911 on a daily candlestick closing basis.
The uptrend could gain further traction on acceptance above the $2,930 static resistance.
The Relative Strength Index (RSI) holds comfortably above the 50 level, suggesting buyers will likely retain control in the near term.
If the February 26 high of $2,930 is taken out sustainably, the next topside barriers are at an all-time high of $2,956 and the $2,970 round level.
If Gold price runs into offers, immediate support is seen at the $2,850 psychological barrier as the 21-day SMA at $2,911 gives way.
The demand area near $2,835 could be a tough nut to crack for sellers.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Brent oil price continued to rise to succeed touching the bearish channel’s resistance line that declined to 71.70$, to rebound downwards clearly from there and head towards resuming the main bearish track within the mentioned channel, and the price needs to surpass 70.10$ to reinforce the chances of continuing the bearish bias in the upcoming sessions.
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WTI Crude Oil will begin this week of trading near the 66.630 via futures pricing on many brokers platforms.
The commodity has continued to see a price squeeze downwards based on proactive energy policy from the White House. The narrative that the Ukraine and Russia negotiation impasse from the previous week may have a lasting effect on sentiment did not prove to be true.
Perhaps the notion that some large players in WTI Crude Oil are contemplating a potential recession is a reason for lower prices, but again day traders need to be careful about hyperbole coming from some analysts and media members who may be letting bias into their perspectives.
The simple fact that WTI Crude Oil continues to move lower under the Trump administration because of proactive energy policy which includes less restraints on production is legitimate.
Now that WTI Crude Oil has hit the lower part of its mid and long-term price range, traders will have to start considering where support levels might start to prove durable. Selling WTI Crude Oil since the middle of January has proven to be a solid wager for traders with patience and the stamina to deal with reversals higher and then a return to the lower trend. However, at some juncture WTI Crude Oil is certain to run into dynamics regarding costs of production and demand, which will start to create areas where speculative outlook may finding buying impetus.
The ability to break below the 66.000 USD ratio in WTI Crude Oil this past week was intriguing. Long-term price charts show challenges to the 65.000 vicinity in the spring of 2023 and late December 2021. But it has been a handful of years since WTI Crude Oil has slumped below with the 64.000 to 63.000 price levels in a sustained manner. Looking for more downside pressure in WTI Crude Oil may remain the flavor for speculators, but they should begin to think about where a floor will be found.
After touching lows on Wednesday and Thursday of this past week, WTI Crude Oil did start to traverse upwards again. The movement higher lacked price velocity which seems to indicate large players feel the commodity belongs within its current realms.
The price range of WTI Crude Oil may start to see a consistent test of its current realm, the question is where speculators will feel comfortable to test wagers.
The 66.000 to 67.500 price range may become the playing field, but traders certainly need to be on the lookout for outliers and listen for possible loud noise to sometimes effect sentiment.
The price of WTI Crude Oil has certainly delivered the lower price range that has been expected. But now that lower values have been attained, traders need to start asking where support levels are and will factor into potential reversals. Speculators should brace for the potential that current values now being demonstrated might begin to become an area where prices get choppy as large players trade and look for advantages.
The Trump administration’s proactive energy stance in not going to change, this creates a fundamental component in WTI Crude Oil which should keep the price of the commodity rater restrained. Looking for too much upside in WTI Crude Oil is likely a mistake, using targets and cashing out trades when they have achieved their technical goals is important. Technical perspectives within these current lower depths will be important. While it is true that WTI Crude Oil may see more downside pressure, traders also know that costs of production will factor into the futures price and create some support. Crude Oil has seen a strong downtrend emerge since the middle of January, and perhaps it isn’t over yet. This weeks’ trading will be interesting to see if support starts to become more durable.
