The price movement on the XAU/USD chart which measures the value of the ema against the US dollar again gives an indication for a reversal of the downtrend.
In last week's trading, the price managed to break the barrier at 1950.00 and tested the SBR zone (support become resistance) around 1965.00 before declining back to the level around 1950.00 at the weekend.
However, at the opening of the trading market earlier this week, the price has fallen below the 1950.00 level and also moved back below the Moving Average 50 (MA50) barrier level for a bearish signal for gold.
The strengthening of the US dollar in the Asian session this morning following reports of the implementation of sanctions measures in Shanghai was also seen to put initial pressure on gold trading.
Continuing into the European session this afternoon, the price has dropped to around 1932.00 as of 4.20pm local time.
Further price declines are expected to reach back to the focus support level at 1900.00 which was reached during the reaction at the last FOMC meeting.
For a lower decline beyond that level, the price will also head to the level around 1870.00 to record the latest 6 -week low.
If the gold price manages to make a surprise to bounce back past the previous 1950.00 level, the resistance zone tested at last week’s high will return to the target.
Passing the SBR zone will push the price of gold back to the 2000.00 focus level.
Gold prices are likely to continue to come under pressure by the strengthening US dollar ahead of the US NFP jobs data report that is in the spotlight this weekend.
