Gold Price Futures (GC) Technical Analysis – Trader Reaction to $1627.90 – $1642.90 Sets the Tone

Gold is trading steady-to-better at the mid-session on Wednesday as investors continue to assess the impact of the coronavirus and the aggressive 50-basis point Fed rate cut of the coronavirus on the U.S. economy. Traders are also awaiting further direction from the other major central banks and governments. Expectations are for additional rate cuts and fiscal stimulus although traders are concerned the central banks may be running out of weapons.

At 16:08 GMT, April Comex gold is trading $1642.20, down $2.00 or -0.12%.

Earlier today, gold traders showed little reaction to the better-than-expected ADP National Employment and U.S. ISM non-manufacturing PMI reports. Although both surveys were taken before concerns over a recession began to escalate, they both showed that the U.S. economy is still on solid ground.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1691.70 will change the main trend to up. A move through $1564.00 will signal a resumption of the downtrend.

The main range is $1458.50 to $1691.70. Its retracement zone at $1575.10 to $1547.60 is support. This zone is controlling the near-term direction of the market.

The short-term range is $1691.70 to $1564.00. Its retracement zone at $1627.90 to $1642.90 is the primary upside target. This zone is currently being tested. Sellers want to form a secondary lower top inside this zone. Buyers want to take it out and form new support.

Daily Technical Forecast

Based on the early price action and the current price at $1642.20, the direction of the April Comex gold futures contract the rest of the session on Wednesday is likely to be determined by trader reaction to the short-term Fibonacci level at $1642.90

Bullish Scenario

A sustained move over $1642.90 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a surge into the downtrending Gann angle at $1663.70. This is provided by additional resistance angles at $1677.70 and $1684.70. The latter is the last potential resistance angle before the $1691.70 main top.

Bearish Scenario

A sustained move under $1642.90 will signal the presence of sellers. Crossing to the weak side of the downtrending Gann angle at $1635.70 will indicate the selling is getting stronger.

The short-term 50% level at $1627.90 is a potential point for an acceleration into an uptrending Gann angle at $1610.00.