Source: PaxForex Premium Analytics Portal, Fundamental Insight
The global economy remains under pressure from the second wave of the Covid-19 pandemic. Yesterday’s signing by fifteen countries of the Regional Comprehensive Economic Partnership (RCEP) added a minor confidence boost to the long-term outlook. It took nine years, thirty-one rounds of negotiations, eight ministerial meetings, and elven inter-session meetings. It created the world’s largest trading bloc, surpassing that of the EU and the trade pact between Canada, Mexico, and the US.
Gold continues to attract bids amid mixed economic data. Japan’s third-quarter GDP surprised to the upside, while many European economies, led by Germany, show signs of another slowdown. The threat of a double-dip recession remains in Europe and the US. And with the Covid-19 pandemic forcing nationwide lockdowns to prevent a total collapse of the healthcare system, volatility in gold is set to rise with price action positioned to regain upside traction and surpass the $2,000 per ounce mark.
The forecast for GOLD/USD remains bullish. This precious metal is approaching the Senkou Span A of its Ichimoku Kinko Hyo Cloud. The Tenkan-sen and Kijun-sen trend sideways inside the cloud, and a breakout above both can catapult the XAU/USD out of the cloud and hurl it towards its horizontal resistance area, which hugs the $2,000 psychological resistance level. Will bulls get more supporting data to warrant a spike in price action? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for GOLD/USD remain inside the or breakout above the 1,886.00 to 1,906.00 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,894.50
- Take Profit Zone: 1,992.00 – 2,015.00
- Stop Loss Level: 1,874.00
Should price action for GOLD/USD breakdown below 1,886.00 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,874.00
- Take Profit Zone: 1,843.00 – 1,849.00
- Stop Loss Level: 1,886.00
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