XAU/USD traded lower on Tuesday, reaching once again the key support territory around 1767, which has been stopping the bears from driving the metal lower since Apr. 19. On the 4-hour chart, we see that gold has been trading sideways since June 17, between 1767 and 1790, but in the bigger picture, it remains well below the prior upside support line drawn from the low of Mar. 31, and well below the downside line taken from the high of June 1st. With all these technical signs in mind, we would consider the short-term picture to be cautiously negative.
A clear dip below the key support zone of 1767 would confirm a forthcoming lower low on both the 4-hour and daily charts, something that may encourage the bears to push the action towards the 1750 zone, defined as a support by the inside swing high of April 14th. If they don’t stop there and manage to overcome that obstacle, we may experience extensions towards the 1733 or 1725 areas, marked by the lows of Apr. 14 and 13 respectively.
Taking a look at our short-term oscillators, we see that the RSI lies below 50 and looks to be approaching its 30 line, while the MACD runs below both its zero and trigger lines. Both indicators detect downside speed and increase the chances for the precious metal to violate the 1767 floor this time around.
In order to start examining whether the bulls have gained control, at least in the short run, we would like to see a clear recovery above 1804, a resistance marked by the inside swing low of June 16. This could pave the way towards the high of the day after, at around 1825, the break of which could carry more bullish implications, perhaps setting the stage for the 1845 territory, defined as a resistance by the inside swing low of June 14.
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