Gold Price Forecast: XAUUSD to test the $1,842 support on selling resurgence

Gold Price trades water near $1,850. For how long can XAUUSD defend $1,842 support? FXStreet’s Dhwani Mehta analyzes the pair’s technical picture.

XAUUSD eyes ECB, US inflation for next big move 

“The ECB is widely expected to announce an end to its QE program while hinting at a July rate hike. Christine Lagarde’s guidance on the future rate hike will hold the key for markets. A more hawkish than expected Lagarde could likely limit the upside in the non-interest-beating yellow metal. Although any reaction to the ECB announcements will be limited, as traders look forward to Friday’s US inflation data for the next big move in the bullion.”

“On the downside, a selling resurgence could challenge the confluence of the horizontal 21 and 200-Daily Moving Averages (DMA) at $1,842 once again. Bears will then attack Tuesday’s low of $1,837, below which a test of the previous week’s low of $1,829 remains on the cards. The $1,820 round level will be the line in the sand for buyers.”

“On the upside, XAU bulls will need to find a strong foothold above Monday’s high of $1,858. The previous week’s high of $1,870 will be tested on gold’s northward trajectory towards the monthly top of $1,874.”

See – ECB Preview: Forecasts from eight major banks, ready for lift-off