Since Gold has reached the bottom near 1765, the price has been rising consistently. The most recent price action shows that the uptrend trendline got rejected cleanly, implying the uptrend continuation. Also, the support area near 1860 was also rejected along with the 200 Exponential Moving Average.
A very interesting fact is that XAU/USD might have confirmed the reversed head and shoulders pattern, as the neckline got broken. On the correctional move down after the breakout, the neckline acted as the support and was rejected near 1860. Right now price is very close to the uptrend trendline, which is likely to be tested before/if the uptrend continues.
However, there is minor support formed at 1884, which is confirmed by 38.2% Fibonacci retracement level. Clearly, it must be broken for the uptrend to take place. Upon the break and close above this resistance, the price of Gold can be expected to rise further. The key resistance is located between 1938 and 1942, which is confirmed by two Fibs as can be seen on the chart.
Nonetheless, as long as 1884 resistance is being respected, the downside pressure will remain high. If XAU/USD manages to break below the 1850 support, the probability will shift in favor of the sellers. It might result in a strong downtrend, where Gold will re-test the 1765 support once again.
All-in-all, it is important to watch either for the break above the 1884 resistance or below the 1850 support. Only then the action is likely to be taken and the trading volume for the Gold should increase.
Key support levels: 1868, 1850
Key resistance levels: 1884, 1900, 1938, 1942
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice
A very interesting fact is that XAU/USD might have confirmed the reversed head and shoulders pattern, as the neckline got broken. On the correctional move down after the breakout, the neckline acted as the support and was rejected near 1860. Right now price is very close to the uptrend trendline, which is likely to be tested before/if the uptrend continues.
However, there is minor support formed at 1884, which is confirmed by 38.2% Fibonacci retracement level. Clearly, it must be broken for the uptrend to take place. Upon the break and close above this resistance, the price of Gold can be expected to rise further. The key resistance is located between 1938 and 1942, which is confirmed by two Fibs as can be seen on the chart.
Nonetheless, as long as 1884 resistance is being respected, the downside pressure will remain high. If XAU/USD manages to break below the 1850 support, the probability will shift in favor of the sellers. It might result in a strong downtrend, where Gold will re-test the 1765 support once again.
All-in-all, it is important to watch either for the break above the 1884 resistance or below the 1850 support. Only then the action is likely to be taken and the trading volume for the Gold should increase.
Key support levels: 1868, 1850
Key resistance levels: 1884, 1900, 1938, 1942
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice