Market update: gold consolidates, key forex pairs test resistance

Gold price technical analysis

Gold took a step back on Tuesday following Monday’s solid performance, slipping by around 0.4% to settle near $2,315. Despite recent fluctuations to the upside and downside, the precious metal has not really gone anywhere in the past two weeks, with volatility shrinking over the period in question in a possible sign of consolidation and traders waiting for new catalysts before reengaging.

The market consolidation is not likely to end until prices either push past resistance at $2,355 or breach support at $2,280. Should resistance be overcome, the focus will turn to $2,415. Additional gains from this point forward may lead to renewed interest in the all-time high. Meanwhile, a break of support could trigger a fall towards a key Fibonacci floor at $2,260. Below this area, the spotlight will be on $2,225.

Gold daily chart

EUR/USD technical analysis

EUR/USD dipped slightly on Tuesday after a third failed attempt to break above its 50-day and 200-day simple moving averages at 1.0790, an area of strong resistance. Prices subsequently edged towards support at 1.0750. Maintaining this technical floor is essential to prevent a deeper retracement; failure to do so might lead to a move towards 1.0725 and possibly even 1.0695.

In the event of a bullish turnaround, the first ceiling to keep an eye on looms near 1.0790, followed by 1.0820, which corresponds to a medium-term downtrend line extended from the December 2023 highs. On further strength, bulls may feel emboldened to initiate an attack on the 50% Fibonacci retracement of the 2023 slump, located around 1.0865.

EUR/USD daily chart

GBP/USD technical analysis

GBP/USD also fell on Tuesday, nearly breaching the 1.2500 handle. A decisive drop below this threshold in the upcoming days could amplify bearish pressure, potentially prompting a retest of technical support near 1.2430. While prices might find stability around these levels during a pullback before a rebound, a breakdown could pave the way for a retrenchment toward the psychological 1.2300 mark.

On the flip side, if buyers stage a comeback and propel cable above its 200-day simple moving average, confluence resistance stretches from 1.2600 to 1.2630, where the 50-day simple moving average intersects with two important trendlines. Upside clearance of this barrier could inject optimism into the market and boost the pound further, creating the right environment for a rally towards 1.2720.

GBP/USD daily chart

^{This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.}