Technical Analysis: Gold fades bounce off key support line with eyes on US stimulus

Technical Analysis: Gold fades bounce off key support line with eyes on US stimulus

Gold prints mild losses while taking a U-turn from 10-day SMA during early Wednesday. With that, the bullion fizzles the previous day’s corrective pullback from the seven-month-old support line, mainly due to hopes of US fiscal stimulus. As a result, gold sellers are once against eyeing the key support trend line, at $1,675 now, an immediate target. It should, however, be noted that the bears will need to below lows marked in May and June 2020, near $1,670, before firming the controls.

Meanwhile, an upside break of a 10-day SMA level of $1,720 will propel the quote towards the November 2020 lows near $1,765. Also acting as an upside barrier is a falling resistance line from January, currently around $1,775. It should be noted that the yellow metal needs a clear break of the late January 2021 tops surrounding $1,875 to reject the current downtrend.

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