Gold edged lower on Monday's trade amid improved risk sentiment after fresh US-China trade talks.
However, price failed to break below 5-DMA support. 5-DMA is upward sloping and is offering strong support.
The pair is trading in the green in the European session. Weakness in the US dollar likely supporting price.
Technical indicators on the hourly charts have turned bullish . Price has broken above 1H 200 SMA and we see a bullish divergence which adds to upside bias.
Focus on U.S. CPI data for further impetus. Gold price could test $1,300 if the US CPI misses estimates.
CPI is likely to remain unchanged at 1.6% y/y. Core CPI is expected to remain unchanged at 0.2% and 2.2% m/m and y/y respectively.
Support levels - 1295.25 (1H 200-SMA), 1291.83 (5-DMA), 1280.57 (Mar 7 low)
Resistance levels - 1300, 1305.92 (38.2% Fib), 1307.19 (5W SMA )
Good to go short on dips around 1295/6, SL: 1290, TP: 1300/ 1305/ 1307
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