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The US dollar weakened a bit against most major currencies, including the Euro and the British pound. GOLD on the other hand moved lower and broke an important support area to test the $1255 level. The recent releases in the US were not as good as the market expected, but GOLD failed to capitalize on the same. There is an important release lined up in the US today, as the ISM Non-Manufacturing Index will be released by the Institute for Supply Management (ISM). Moreover, the Services Purchasing Managers Index (PMI) will also be released by Markit Economics. If the outcome surpasses the expectation, then it might lift the US dollar in the near term and might push GOLD lower.

There was a critical bullish trend line formed on the hourly chart of GOLD, which was breached recently by sellers. This particular break ignited a move lower, which took GOLD below the 100 hour moving average. GOLD traded as low as $1255 and now correcting higher. It might head towards the 38.2% fib retracement level of the last drop from the $1285 high to $1255 low. However, the most important resistance is around the 50% fib retracement level, which is sitting around the 100 hour MA. Any further gains might push GOLD towards the broken trend line, followed by the 200 hour MA.

If GOLD moves lower from the current levels, then a break below the last low of $1255 might take it towards the $1240 level.

Overall, one might consider selling rallies in GOLD as long as it is trading below the 100 hour MA.

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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com