Key discussion points:

• XAU / USD maintains its uptrend line, but key resistance is on the way
• Gold has lost momentum so far in September

Gold (XAU / USD) is starting to look a bit feverish once again even though it managed to climb higher at the end of last week. pullback from the last two sessions is not too extensive yet and is likely to offer new buyers a better chance to enter, but there is not much room for maneuver before the outlook begins to look slightly bearish.

So far, the uptrend since XAU / USD reversed higher in August is largely intact, with small reversals along the way allowing another leg to the upside. question now is whether this is another one of those momentum swings or if there are more, especially considering how strong the pullback has been in recent days compared to other times.

XAU / USD daily chart

Market sentiment has been quite optimistic so far, which is not helping the demand for safe havens, and as the Fed prepares for a possible decline towards the end of the year, the central bank’s inaction is no longer as strong. a higher return on your investments in unprofitable assets like gold.

Friday’s bullish momentum on weaker-than-expected NFP data once again showed that gold price movements are primarily driven by the US dollar at this point, and that there is still room for a stronger currency. . prospects for gold in the medium term are not very good.

This is true even as the pandemic spirals out of control once again, with new cases rising rapidly around the world, as the US dollar may outperform regardless of the state of the US economy. demand for safe haven increases, overshadowing gold. as protection trade.

XAU / USD monthly chart

Movement so far in the first 5 trading days of September has been virtually nil, with a non-existent body and small tails showing a lack of momentum. August candle proved to be a clear sign of indecision, with a long bearish tail showing that the bearish collapse reversed to end the month completely flat, making it difficult to build stronger moves in September. So far, XAU / USD has encountered strong resistance to the 38.2% Fib retracement from the August 2020 highs, an area that has held bulls to a halt for the past three consecutive months. On the downside, Fibonacci 50% (1.763) is probably the best support area in the future.

Fibonacci Confluence in FX Pairs

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– Written by Daniela Sabin Hathorn, Market Analyst

Follow Daniela on @HathornSabin

Read also US dollar remains under pressure while the euro reaches 1.18

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