Chart of the Day XAUUSD

<h2><span>Chart of the Day XAUUSD</span></h2>
<p><strong>XAUUSD Triangle Play &#8211; Probable Price Path</strong></p>
<p><span>Fed chair Powell’s warning that US outlook is “both highly uncertain and subject to significant downside risks” and “additional fiscal support could be costly, but worth it” succeeded in dampening investor risk appetite overnight. He also dismissed negative rates as “not something that we’re considering”, which prompted the futures market to pare back but did not fully price out the possibility. The S&amp;P500 declined 1.7% (after briefly dipping below the 2800 handle) while VIX edged up to 35.28 and UST bonds bull-flattened with the 10-year yield at 0.65% amid a 30-year auction. Elsewhere, RBNZ expanded the size of its Large Scale Asset Purchase Program (LSAP) from $33b to $60b and added it “remains prepared to do whatever it takes” including adding other asset types to LSAP and reducing the OCR further from the current 0.25%. The MPC minutes also noted a negative OCR “will become an option in future, although at present financial institutions are not yet operationally ready”.</span></p>
<p><span>From a flow perspective trading desks report that XAUUSD continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about exhausted monetary policy, extended global equities, political uncertainty, coronavirus fallout, systemic risk and trade war threats. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax</span></p>
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<p><img class="aligncenter size-full wp-image-43502" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-14-10.03.05.png" alt="" width="2116" height="1172" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-14-10.03.05.png 2116w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-14-10.03.05-300×166.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-14-10.03.05-1024×567.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-14-10.03.05-768×425.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-14-10.03.05-1536×851.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-14-10.03.05-2048×1134.png 2048w" sizes="(max-width: 2116px) 100vw, 2116px" /></p>
<p><span>From a technical and trading perspective, XAUUSD is currently carving a technical corrective pattern ABCDE as such it possible that prices will make one final test of the triangle support at 168, watch for a key reversal pattern here, if seen, then bullish exposure should be rewarded as technical demand drive prices higher through 1730 enroute to 1766 equality objective, caution is counselled here as this area may witness significant profitaking and or reversal. If there is only limited profit taking then bulls will target the Fibonacci cluster at 1860/80 as the primary objective for the upside extension.   </span></p>
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