Gold Forecast Today 08/05: Faces Pullback (Chart)

(MENAFN- Daily Forex)

• Gold markets have pulled back during the trading session on Wednesday as we got announcements coming from the Americans and the Chinese suggesting that they will discuss tariffs and Switzerland soon.
• This obviously is very bullish for markets overall, and this has some of the fear coming out of the psyche of some traders.
• Keep in mind that the gold market is often used as safety, so it does make a certain amount of sense that we have fallen as a result.

Technical Analysis

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I don't really care that fear is leaving the market in the short term, the reality is that this is still a very bullish market, and you can't fight that. The $3300 level and again at the $3200 level, should be rather supportive. The 50 Day EMA is racing toward the $3200 level, and it could offer significant support. I would love to see gold drop that far, but it probably won't unless Jerome Powell says something during the press conference that has people thinking that the Federal Reserve is either going to be extraordinarily hawkish, or perhaps even dovish, because that could cause a bit of the knee-jerk reaction by traders selling gold in order to take on more risk in places like the NASDAQ.

EURUSD Chart by TradingView

The size of the candlestick during the trading session on Wednesday isn't overly concerning, but it is big enough to at least pay attention to. The $3500 level above is a major target and resistance barrier that people will have to pay close attention to as well, because if we break above there, then we see this market go much higher. In fact, you could take a“measured move” on a break above the $3500 level to reach the $3800 region, as this is a $300 area of potential consolidation.

If we were to break down below the 50 Day EMA, then it's possible that we could go looking to the $3000 level. Anything under the $3000 level would have me concerned about the overall trend, but right now I think there are still plenty of buyers out there to keep it well above that region.

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