Gold Price: A Break Out May Lead XAU/USD to Monthly Resistance Level
XAU/USD Price Forecast
Gold Price – Trendless Move
On Sep 24, Gold ended its uptrend move and corrected lower creating a lower high at $1,535. Later, on Oct 11 the price corrected higher carving out a higher low at $1,474. This led XAU/USD to stuck in a sideways pattern.
On Wednesday, the Relative Strength Index (RSI) crossed above 50 indicating to the end of downtrend move with a possible start of uptrend momentum.
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Gold DAILY PRICE CHART (DEC 25, 2017 – Oct 25, 2019) Zoomed out
Gold DAILY PRICE CHART (20 June – Oct 25, 2019) Zoomed In
Looking at the daily chart, we notice On Oct 10, XAU/USD declined to a lower trade zone $1440 – $1510. However, the price reversed direction before testing the low end of the zone highlighting seller’s weakness.
Hence, a close above the 50-day average and the high end of the zone could generate two bullish signals. This may lead Gold to trade towards the vicinity of $1,555-58. Further close above $1,558 could push the price towards $1,634. Nevertheless, the weekly resistance area and levels marked on the chart (zoomed in) should be kept in focus.
That said, any failure in closing above the high end would reflect buyer’s hesitation. Consequently, could lead XAU/USD towards the low end of the zone. Further close below the low end may press the precious metal even lower towards $1400. In that scenario, the weekly support area and levels underlined on the chart should be watched closely.
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Gold Four-HOUR PRICE CHART (Sep 26 – Oct 25, 2019)
From the four-hour chart, we notice since Oct 15, Gold has been trading in a narrow range. However, yesterday the price abandoned this range and traded higher eying a test of the vicinity of $1,517-20.
Hence, a break above $1,520 could cause a rally towards $1,555. Although, the weekly resistance level underlined on the chart should be considered. On the other hand, any break from the other side of the range i.e. below 1,473 could send XAU/USD towards $1,440/oz.
See the chart to know more about key technical levels in a further bullish/bearish scenario.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.