Gold Price Forecast: XAU/USD – Signals and Levels to Keep in Focus
XAU/USD Technical Analysis
Gold Price – Hesitant Bulls
On Wednesday, Gold made an over seven and a half-year high at $1,789 then retreated after as some bulls seemed to cut back. On Friday, the price closed the weekly candlestick with a Doji pattern highlighting the market indecision at this point.
Last week, Gold rallied amid doubt of fast global recovery due to rapid rises in coronavirus cases in the US and elsewhere. Nonetheless, positive news about Coronavirus vaccine trials revived hopes of a V shape recovery, and the stronger than expected US job report kept investor’s spirits high.
Gold DAILY PRICE CHART (April 1, 2019 – July 6, 2020) Zoomed out
Gold DAILY PRICE CHART (April 7 – July 6, 2020) Zoomed In
On June 22, the price broke above the upper line of bullish rectangle marked on the chart eyeing a test of $1,824. Additionally, the price climbed to the current trading zone $1,752 -$1,796.
A close below the high end of the zone signals bull’s hesitation and may lead some of them to exit the market and press Gold to fall towards $1,685. A further close below that level could send the price even lower towards $1,635.
On the flip side, a close above the high end of the zone reflects a stronger bullish sentiment and this may cause a rally towards $1,859.
Gold Four-HOUR PRICE CHART (June 11 – July 6, 2020)
On June 19, XAU/USD broke above the downtrend line originated from the June 11 high at $1,744, and resumed bullish price action. Currently, the price trades above the uptrend line originated from the June 26 low at $1,747 therefore, any violation of this line would generate a bearish signal.
To conclude, a break above the $1,803 handle could increase the likelihood of testing $1,824. On the other hand, any break below $1,744 could send Gold towards $1,721. That said, the weekly resistance and support levels underscored on the four-hour chart should be considered.
Written By: Mahmoud Alkudsi, Market Analyst
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.