Price of gold declined on Monday against a stronger US Dollar right before major economic news like the US key inflation data and the Federal Reserve policy meeting. The dollar index rose 0.3% making dollar-priced bullion more expensive for overseas buyers. The price of the "yellow metal" is perfectly respecting the boundaries of the rising wedge formation that is in effect since mid November, says Antreas Themistokleous, market analyst in Exness, this might be the case for now but major news coming up this week is expected to fuel up the volatility so a break out of this formation in the following days is a very possible scenario’
From the technical side the price of gold continued the bullish momentum with the price trading in a rising wedge formation. A rising wedge is usually a bearish signal as it indicates a possible reversal during an up-trend especially if there is a break below the lower side of the wedge. If this is the case then we can expect further movement to the downside with a first point of support around $1,748 level which is the 50% of the daily Fibonacci retracement level and the psychological support area of the round number.
Further continuation to the upside we can expect the price to continue trading within the “boundaries” of the wedge with a strong point of resistance being around the $1,824 area which consists of the 78.6% of the Fibonacci, the upper band of the Bollinger bands and also the upper level of the wedge formation.
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