As apparent on the chart, the pair hindered near a medium-term channel at 1,343.00 during the first part of Friday. However, the prevalence of strong upside momentum mid-session allowed for a breakout of this pattern and further advance up to the 1,350.00 mark which coincides with the upper boundary of a senior channel.
Meanwhile, the rate has been trading sideways since mid-Friday. This shows that bulls could nevertheless be exhausted and therefore fail to reach the aforementioned area. A possible downside target for today is the 23.60% , the weekly PP and the 55-hour near 1,336.00.
Gold continues to appreciate against the US Dollar for the sixth consecutive session. Despite a few hours of consolidation on Monday morning, the yellow metal managed to gather momentum and push towards the 1,356.00 mark mid-session.
Further climb did not follow, as it was restricted by the senior channel. As a result, the pair failed to reach the upper boundary of the junior formation near 1,360.00.
Even though technical indicators are still flashing bullish signals, they are gradually moving away from the overbought territory. Thus, some bearish pressure could prevail in the market today. This scenario would be confirmed by a breakout of the 55-hour SMA and the junior channel.
A possible trading range for today is the 1,345.00/1.365.00 area.
XAU/USD did not introduce any surprises during Tuesday’s trading session. The pair bounced off the upper boundary of a three-month channel and the monthly R1 near 1,356.00 prior to breaching the short-term channel and the 55-hour SMA.
Gold managed to recover some of the losses during the Asian session, but nevertheless remained supported by the 100-hour SMA. Some downside potential still exists in the market.
Thus, the yellow metal might still target the 23.60% Fibo retracement at 1,336.00. However, it is likely that the current bearish momentum does not prevail long in the market, thus allowing bulls to take control soon.
In terms of upside potential, the aforementioned channel line should be strong enough to prevent further advances.
The yellow metal continues to slide lower against the US Dollar for the third consecutive session. The pair lost 1.58% on Wednesday, consequently breaching several important support clusters, including the 200-hour SMA and the monthly PP near 1,330.00.
This strong downside momentum allayed later in the session when Gold tried unsuccessfully to regain its position above the long-term moving average.
Technical indicators flash bullish signals in this session, as they are located in the oversold territory. However, it is yet to be seen if the strong resistance at 1,330.00 is breached, because bulls might lack the necessary force to overcome this cluster.
In terms of downside potential, the rate is likely to target the 38.20% Fibonacci line at 1,317.00.