Gold Outlook: XAU/USD Price – Bullish Signals on The Radar Ahead of NFP Data
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Gold Price – Sideways Move Could End Soon
On Oct 11, Gold corrected higher creating a higher low at $1,474 ending a short downtrend move. Last Friday, buyers rallied the price however, pulled back after failing to break above the resistance area $1,517-20 discussed in last week update. This caused more of a sideways move.
This week, the price declined however, has not been able to break below the Oct 22 low at $1480, highlighting a possible comeback from the buyers.
On Wednesday, the Relative Strength Index (RSI) rose above 50, reflecting a possible start of uptrend momentum.
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Gold DAILY PRICE CHART (FEB 18, 2018 – Nov 1, 2019) Zoomed out
Gold DAILY PRICE CHART (20 July – Nov 1, 2019) Zoomed In
Looking at the daily chart, we notice yesterday XAU/USD rallied above the 50-day average, then closed in a higher trading zone $1,510- $1,555 providing two bullish signals.
Thus, the precious metal may be on its way for a test of the high end of the zone. Further close above $1,558 could see Gold trading towards $1,634. Although, the weekly resistance levels underlined on the chart (zoomed in) should be kept in focus.
That said, any close below the low end of the aforementioned trading zone may extend further the sideways move and could press XAU/USD towards $1,440. In that scenario, the weekly support levels underscored on the chart should be considered.
See the chart, to know more about the lower trading zone with support levels price would encounter in a further bearish scenario.
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Gold Four-HOUR PRICE CHART (Oct 3 – Nov 1, 2019)
From the four-hour chart, we notice on Wednesday Gold tested $1,481 then reversed its direction and rallied towards $1,510, indicating to a clear weakness from seller’s side.
Therefore, buyers could rally the price form where they failed last week. In other words, a break above $1,520 could send XAU/USD towards the high end of the aforementioned trading zone. However, the weekly resistance level underlined on the chart should be monitored.
On the other hand, a break below $1,493 could see Gold trading even lower towards $1,481. Nevertheless, the daily support level underlined on the chart should be watched closely.
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.