Gold at Technical Crossroads Ahead of GDP, PCE; ASX 200 Stalls at Resistance

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Gold’s technicals suggest a possible near-term pullback, but a break above key levels could signal a fresh rally. Meanwhile, the ASX 200 faces resistance near 8500, with traders eyeing Wall Street cues and upcoming GDP and PCE data.

Gold Futures (GC) Technical Analysis

A question at the back of my mind for gold is whether we’ve already seen the completion of an ABC correction. If we have, it suggests that prices will hold above 3120 and break above their record high. Keep in mind, this scenario could still allow for a pullback over the near term, but it must hold above wave C.

Another scenario for gold is, of course, a deeper correction, such as a double zigzag. Before we dismiss that possibility, note that gold bulls are on the cusp of failing to take out the prior month’s high for the first time since November — which marked the start of a two-month correction.

Gold Futures: Daily Chart

Prices are holding above the April low and the 20-day EMA. Interestingly, gold has also found support around 3295 once again on a daily-close basis, creating a near-term support zone around 3270–3295.

A break beneath 3270 would confirm a near-term top and open the door for a move towards 3200, near the 50-day EMA. However, bulls are likely to step back in and support prices, potentially forming a swing low. We’d need to see a break beneath 3125 before assuming a deeper correction.

ASX 200 Futures (Australian 200) Technical Analysis:

Prices initially continued higher on Wednesday to take the ASX 200 up 18.4% from its April low. However, resistance was met almost perfectly at the 8489 weekly VPOC (volume point of control), resulting in a reversal of the day’s gains and a shooting star reversal by the day’s close. This suggests near-term exhaustion to the trend below the 8500 handle.

Given the slight pullback on Wall Street, my preference is to fade into moves towards Wednesday’s high in anticipation of a minor pullback. A break beneath 8400 brings the 8327 level into focus, which has been pivotal in recent months. A break above 8500 assumes bullish continuation and brings the highs around 8600 into focus.

ASX 200 (Australian 200 Index) at a Glance

The ASX 200 cash market formed a shooting star candle on Wednesday to warn of near-term exhaustion
106 ASX 200 stocks advanced, 75 declined, 719 were unchanged
Six ASX 200 sectors advanced (led by energy), five declined (led by financial)

Economic Events in Focus (AEST / GMT+10)

11:00 – New Zealand Business Confidence (NZD/USD, AUD/NZD, NZD/JPY)
11:30 – Australian Capital Expenditure (AUD/USD, ASX 200, AUD/JPY, AUD/NZD)
15:00 – Japanese Household Confidence (USD/JPY, GBP/JPY, EUR/JPY, Nikkei 225)
19:00 – BOE Breeden Speaks (GBP/USD, GBP/JPY, EUR/GBP, FTSE 100)
22:30 – US Q1 GDP (Price Index, Core PCE Prices, Corporate Profits, Real Consumer Spending), Jobless Claims (USD, Gold, WTI Crude Oil, S&P 500, Nasdaq 100, Dow Jones)
22:30 – Canadian Current Account, Average Weekly Earnings (USD/CAD, CAD/JPY)
04:00 – FOMC Kugler Speaks (USD, Gold, WTI Crude Oil, S&P 500, Nasdaq 100, Dow Jones)
05:00 – BOE Governor Bailey Speaks (GBP/USD, GBP/JPY, EUR/GBP, FTSE 100, FTSE 250)
06:00 – FOMC Daly Speaks (USD, Gold, WTI Crude Oil, S&P 500, Nasdaq 100, Dow Jones)

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

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