Gold Chart Highlights A Bullish Pattern - XAU/USD Weekly Price Forecast
Gold Price - XAU/USD Technical Outlook
- XAU/USD from neutral to bullish
- Levels and thresholds to keep an eye on
XAU/USD Price – Bulls Take Charge
This week, Gold broke above $1,600 handle then printed yesterday $1,623 – its highest level in seven years.
The Relative Strength Index (RSI) pointed higher and pushed to overbought territory emphasizing the strength of bullish momentum.
Gold DAILY PRICE CHART (MaY 31, 2018 – FEB 21, 2020) Zoomed out
Gold DAILY PRICE CHART (July 31 – FEB 21, 2020) Zoomed In
Looking at the daily chart, we notice that on Jan 8 bulls led Gold to $1,611 then pulled back after, causing the market to trade in a sideways move creating lower highs with higher lows, then developed an ascending triangle. This week, the price broke above the upper line of the triangle eyeing a test of $1,660. Today, Gold rallied to a higher trading zone $1,626 - $1,672.
A close above the low end of the zone may encourage bulls to push towards the high end of the zone. Another close above $1,685 opens the door for more bullishness towards the vicinity of $1,725-54. Having said that, the weekly resistance levels marked on the chart should be monitored as some traders might exit/join the market around these points.
On the other hand, any failure in closing above the low end of the zone reflects bull’s reluctance. This may lead some of them to exit the market reversing XAU/USD direction towards the vicinity of $1,558-55. Yet, the daily and weekly support levels printed on the chart should be watched closely. Its worth noting that, any bearish move requires clearing $1.526 first.
Gold Four-HOUR PRICE CHART (DEC 30 – FEB 21,2020)
From the four-hour chart, we noticed that on Feb 12 Gold pointed higher then ended its sideways move. On Tuesday, the precious metal accelerated its upside move and abandoned the narrow uptrend channel originated from the Feb 12 low at $1,561.
Thus, a break above $1,645 may trigger a rally towards $1,660. Although, the weekly resistance level underlined on the chart would be worth monitoring. In turn, a break below $1,603 could send XAU/USD towards $1,576. Nevertheless, the daily support level underscored on the chart should be considered.
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.