Will the USD pressure last?

позавчера

On the 4-hour chart, gold prices remain within the uptrend channel established since late December 2024. Despite the sharp corrections in the recent session, the current price ($2,670/ounce) is still above the dynamic support zone of the EMA 34 and EMA 89, indicating that the uptrend has not been broken. However, the pressure from the USD Index – which rose to a 2-year high of 109.35 points – is causing gold to lose short-term momentum.

On a closer look, the important resistance zone at $2,696/ounce, corresponding to the recent peak, has triggered strong selling pressure. Meanwhile, the RSI in previous analyses has shown signs of overbought conditions, increasing the possibility of a correction. However, the main trend line and the $2,660/ounce support zone are still acting as psychological support for the bulls.

In terms of news, the strength of the USD comes from two factors: positive US economic data and high bond yields (nearly 4.8%). These yields have attracted capital flows away from gold to invest in bonds. In addition, investors are worried about financial instability before Donald Trump returns to the White House on January 20. This uncertainty could spur some gold buying to hedge against risks, creating support for gold prices in the short term.

Personal trading strategy:
Bullish scenario: If the price holds above the $2,660/ounce support zone, I expect the price to bounce back to test the $2,696 zone. A breakout of this zone could push the price towards the target of $2,720.

Bearish scenario: If price breaks the $2,660 zone and the 89 EMA, I expect price to fall further to the $2,640/ounce support zone, or even $2,620.