Home Forex Forex Market Analysis Overbought gold Seems to Head for 38.2% Fib – Quick Trade Plan! 

Overbought gold Seems to Head for 38.2% Fib – Quick Trade Plan! 

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Gold prices climbed more than 2.5% to over the seven-year top as the extension of coronavirus outside China, and its potential collision on global economic growth pushed safe-haven buying.

Japan has recorded 837 coronavirus cases, including 691 cases related to the “Diamond Princess” cruise ship, with a fatality number of four. The number of confirmed cases in South Korea surged to 602 (6 deaths) as the country raised its infectious-disease warning to the highest level. 

Italy said there were over 150 cases across five regions (3 deaths). Meanwhile, in China, official numbers showed nearly 77,000 cases and over 2,400 deaths. The World Health Organization announced it is concerned about the growing number of problems without any apparent connection to China. Consequently, investors are moving funds into gold due to its safe-haven demand.

Gold – XAU/USD – Daily Technical Levels

Support     Resistance 

1,629.58    1,653.22

1,615.82    1,663.11

1,592.18    1,686.76

Pivot Point 1,639.47

On the technical side, the XAU/USD is trading at 1,679 and has entered the overbought zone where the chances of bearish corrections pretty solid. On the lower side, gold may show bearish correction until 1,658, which marks 38.2%. On the higher side, resistance continues to stay around 1,690. A bullish breakout of 1,690 may lead to gold prices to prices 1,710 resistance. Let’s consider taking sell trades to capture the correction below 1,680 until 1,670/1,668. Good luck! 

   

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