Gold(XAUUSD) price is extending a three-day rebound as the US Dollar rise comes to a halt.
gold(XAUUSD) price is continuing its recent rebound, rising for the third day in a row on Wednesday and moving away from the lowest level in two months at $1,805.Gold has regained $1,830 on its way to recovery, reaching its highest level in four trading days. The gold price remains bullish, as the US dollar (USD) has entered a consolidation phase after achieving seven-week highs.
Mixed market mood and aggressive ECB expectations restrict US Dollar gains.
The recent run of conflicting US economic data has caused the market to reprice the market’s hawkish US Federal Reserve (Fed) forecasts, particularly after the headline US Durable Goods Orders fell 4.5% in January, sparking worries. concerns a potential ‘soft-landing’. The US Conference Board Consumer Confidence Index fell to 102.9 in February from 106.0 in January (revised from 107.1).
The gold price rebound is underway amid aggressive European Central Bank (ECB) peak rate predictions, which keep the EURUSD pair anchored and limit the US Dollar’s gain.
On Tuesday, inflation rose in France and Spain, raising forecasts for an ECB terminal rate of 4.0% this year, up from 3.75% just a week earlier. As a result, the spotlight will be on German inflation data for the ECB to reprice ahead of Eurozone inflation data expected on Thursday.
The ISM Manufacturing PMI for the United States might revive hawkish Federal Reserve predictions.
The Investors are now looking for new trade momentum from the United States ISM Manufacturing PMI data.
After that, the official and ISM Manufacturing PMI statistics from the United States will give further information on the health of the US economy, influencing Fed rate rise forecasts. The headline US ISM Manufacturing PMI is expected to rise to 48.0 in February from 47.4 in January, while the Prices Paid sub-index is expected to rise to 45.0. The New Orders Index is expected to rise to 43.7 from 42.5.
Gold(XAUUSD) Technical Outlook
In the daily chart, gold price completed a falling wedge formation after closing above the falling trendline resistance at $1,813 on Tuesday. If the upside break establishes itself, the gold price might move higher towards the previous week’s high of $1,848, above which the psychological threshold of $1,850 will come into play.
Farther higher, the downward-sloping 21-Daily Moving Average (DMA) at $1,853 may put the bearish pledges to the test.
After testing the oversold region earlier this week, the 14-day Relative Strength Index (RSI) is returning towards the midline. Nonetheless, the 21 and 50 DMAs bearish crossing may continue to be a drag on the gold price at higher levels.
Any retracement might challenge the initial support level of $1,820, below which two-month low of $1,805 will be scrutinized. The $800 level is considered as the next drop target. If the downside gains traction, the positive 100 DMA around $1,797 will be on the radar of gold sellers.
