February 22, 2024

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Gold prices are challenging a major resistance area, as USD/JPY remains below the 200-day simple moving average at the moment.

Gold prices are challenging a major resistance area, as USD/JPY remains below the 200-day simple moving average at the moment.

USD/JPY, gold price forecast

  • gold prices It advances, but fails to overcome cluster resistance
  • USD/JPY Lacking directional conviction, the pair is trading just below the 200-day simple moving average
  • This article explores the technical profile of gold and American dollar/JPYFocusing on important price thresholds that may be relevant heading into the final trading sessions of 2023

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Most Read: USD in Risky Waters, Technical Settings on EUR/USD, GBP/USD, Gold

Gold prices (XAU/USD) headed higher on Tuesday in thin post-Christmas trade, rising nearly 0.7% to $2,065, supported by a weaker US dollar, which fell toward its lowest level since late July.

After Tuesday's advance, the XAU/USD pair reached the threshold of an important resistance area, ranging from $2,070 to $2,075. Previous attempts to break through this ceiling on a sustainable basis have failed, so history may repeat itself this time.

In case of downside rejection from current levels, support appears at $2050, followed by $2010. The bulls must defend this floor with all their might – failure to do so could revive bearish momentum, paving the way for a drop towards $1,990. With further weakness, focus shifts to $1975.

On the other hand, if buyers can decisively push prices above $2,070/$2,075, the bullish momentum could accelerate, creating the right conditions for the precious metal to start consolidating above $2,100. Continued strength could pave the way for a retest of the all-time high at $2,150.

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Gold price technical chart

Gold price chart created using TradingView

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How to Trade USD/JPY

Technical analysis of the USD/JPY pair

The USD/JPY pair rose modestly on Tuesday but was unable to reclaim the 200-day simple moving average. If prices remain below this indicator on a sustained basis, selling pressure could resurface and gather momentum, paving the way for an eventual decline towards the December lows at 140.95. While this technical zone could offer support during a bounce, a breakout could guide the pair towards 139.50.

On the other hand, if buyers take over and push the exchange rate above the 200-day simple moving average, resistance lies at 144.80. Overcoming this hurdle will be difficult for the bulls, but a successful breakout could create favorable conditions for a bullish push towards the 146.00 handle. With more strength, all eyes will be on 147.20.

USD/JPY technical chart

USD/JPY chart created using TradingView