Gold Pushes Above $1300 After Trump cancels North Korea summit - 25 May 2018


Gold prices rose for a second straight session on Thursday as the dollar extended losses and equities edged lower on news that U.S. President Donald Trump canceled a planned June meeting with North Korean leader Kim Jong Un. XAU/USD reached the $1306 level as expected after prices broke through the resistance at the $1300 level. In economic news, the National Association of Realtors reported that sales of existing homes decreased 2.5% to a seasonally adjusted annual rate of 5.46 million in April from 5.60 million in March.

The market is trading above the Ichimoku clouds on the H1 and the M30 charts; plus, we have positively aligned Tenkan-Sen (nine-period moving average, red line) and Kijun-Sen (twenty six-day moving average, green line) on the H4 time frame. The short-term charts suggest that a test of 1313/0, the confluence of a horizontal resistance and a six-week old bearish trendline, is likely if the market convincingly breaks through the resistance at 1306. A break above 1313 implies that the market will be targeting 1316 next.

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On the other hand, if the market fails to sustain a break above the 4-hourly Ichimoku cloud, prices could return to test the support at 1300. A decline below 1300 could trigger further weakness and open a path to 1297/6. The bears have to produce a daily close below 1296 to make an assault on the 1287.40-1286 zone, where the bottom of the 4-hourly cloud sits. On its way down, expect to see some support at 1292.50.

xauusd h4

Alp Kocak has been trading Forex since 2003. He writes technical analysis based on Japanese candlesticks and Ichimoku Kinko Hyo.