Will Gold Continue Respecting The Downside Channel?
JFD Team | Dec 11, 2019 06:28AM ET
XAU/USD traded higher this week, after it hit support near the 1458 zone. However, the precious metal continues to trade within the downside channel that’s been in place since Aug. 19, and thus, any further recovery may stay limited, and the bears could take charge again soon.
If the metal continues to trade higher for a while more, it may once again meet strong resistance near the 1480 zone, or the upper end of the channel. The bears could reenter the action from near those zones and may decide to drive the battle lower for another test near 1458, or near 1445, a support marked by the low of Nov. 12.
Looking at our daily oscillators, we see that the RSI, although below 50, turned up and now appears ready to move back above that equilibrium line. The MACD lies within its negative zone, but above its trigger line, heading towards zero. Both indicators support the case for some further recovery before, and if, the bears decide to take the reins again.
In order to start examining whether the bulls have gained the upper hand, we would like to see a clear move above the 1515 zone. That zone provided strong resistance between Oct. 3 and Nov.1. Gold would already be above the upper bound of the downside channel and may travel towards the 1535 area, marked by the highs of Sept. 24 and 25. Another break, above 1535, may open the way towards the 1557 area, marked by the peak of Sept. 4.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.