Gold Eyes Shooting Higher As Support Holds - XAU/USD Technical Outlook
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Gold - XAU/USD Forecast
Gold Price – Indecisive Traders
Last week, the price declined to $1,535- its lowest level in over a week. On Friday, Gold closed the weekly candlestick with another Doji pattern reflecting that market’s indecision is still on. This week, the precious metal traded in a trendless move as every candlestick reversed the effect of the one before.
Alongside that, the Relative Strength Index (RSI) dipped below 70 then remained flat highlighting a stalled uptrend momentum
Gold DAILY PRICE CHART (MaY 31, 2018 – Jan 23, 2020) Zoomed out
Gold DAILY PRICE CHART (July 31 – Jan 23, 2020) Zoomed In
Looking at the daily chart, we notice on Jan 14 the price U-turned and pushed higher signalling that Gold bulls were not done yet. This led the market to push to a higher trading $1,555 - $1,625.
Therefore, the price could be on its way for a test of the high end of the zone. Nevertheless, the weekly resistance levels underscored on the chart (zoomed in) would be worth monitoring as some traders may join/exit the market around these points.
A close below the low end of the zone reflects bull’s hesitation. This may lead some of them to cut back and reverse the market’s direction towards $1,526. Further close below this level opens the door for XAU/USD bears to take charge and press towards $1,453. In that scenario, the weekly support levels and area marked on the chart should be considered
Gold Four-HOUR PRICE CHART (Oct 15 – Jan 23,2020)
From the four-hour chart, we noticed that on Jan 21 Gold rallied to $1,568 – its highest level in two weeks. Currently, the yellow metal could be on its way for a test of the uptrend line originated form the Jan 13 low at $1,535. Any violation of this trend line could be considered as a bearish signal.
A break below $1,546 could send XAU/USD towards $1,526. That said, the Jan 13 low at 1.535 should be monitored closely. On the other hand, a break above $1,561 may cause a rally towards $1,575. Yet, the aforementioned Jan 21 high should be kept in focus.
See the chart to know more about key levels Gold would encounter in a further 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.