XAUUSD New Bull Cycle mapped! Approaching first Resistance Zone?

Gold (XAUUSD) has technically started its new Bull Cycle after breaking above the Resistance and previous All Time High (ATH) into green overbought territory. Being overbought in such instances isn't necessarily bearish but suggests that even though the long-term trend is now heavily bullish (and should be for the next year or so), we should look for key Resistances to offer relief pull-backs.

As you can see on this 1W chart, there are strong similarities of the current Cycle (both Bear and Bull) with the previous one (June 2016 - August 2020). The Bear Cycle's come in the form of Cup patterns, while the Bull Cycles start on Channel Up patterns at the bottom of the Bear ones. During the previous Bull Cycle, the 1W MA50 (blue trend-line) has supported all the way from its bullish break-out (December 24 2018) until deep into the next Bear (February 01 2021).

Right now the 1W MA50 has been supporting since October 09 2023, which is shortly after the dashed Channel Up started. That is an important pattern as it currently has a maximum upside to 2350 for a Higher High. The dotted Channel Up on the contrary, which was initiated at the bottom of the Bear Cycle has already touched its Higher High.

This means that Gold's new Bull Cycle is facing its first significant Resistance Zone of the current run: 2300 - 2350. Relative to the previous Bull Cycle, Gold had it's first Resistance rejection on August 26 2019, making a Higher High and started to pull-back for almost 100 days (3 months). As the current bullish trend is significantly stronger than the 2019 one, the dashed Channel Up being narrower, I doubt that Gold will correct for that long, but on the next red 1W candle, we have to consider the possibility for a short-term correction.

The August 2019 one pulled as low as the previous High before the rejection (bold black line). This suggests that 2220 - 2200 is Gold's floor at the moment and shouldn't be broken. Back to its overbought status, the 1W RSI gives a clear indication of that. Once it starts reversing inside an Arc pattern, we will confirm the correction we're discussing now. And after it forms systematically Lower Highs on quarterly intervals, we can expect by the 3rd Lower High to be close to the Top of the Bull Cycle.



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