XAU/USD: gold may weaken
Trade idea
SELL 1,266; TP 1,256.55; SL 1,269
The technical necessity of a downturn was visible in XAU/USD for a long time. Yet, gold made an attempt to strengthen in May but was stopped by resistance just above $1,300. The price is now once again below this key level. Last week’s bearish candlestick on W1 has a long upper wick. This is a negative sign. Both weekly and daily Awesome Oscillators are declining.
The USD has been leading as a safe haven during the last several days, and this situation is likely to continue. Some risks/volatility in this scenario will be related to the publication of the FOMC meeting minutes on Wednesday. The USD will be fine and gold will decline if the minutes are not dovish (if the Fed's members really didn't consider a rate cut).
XAU/USD now has several support levels: 100-week MA at 1,277.25 (now above the price but not far), 1,275.50 (38.2% Fibo of the 2018-2019 advance), 1,266.15 (this year’s lows). It’s possible to trade between these support levels or on the break below the latter).
