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Gold prices are rising, but is there enough momentum for XAU/USD to continue? -by Ecork

Gold, XAU/USD, trend lines, bullish engulfing, technical analysis – talking points:

  • Gold prices aim higher in the past 24 hours, so is there more to come?
  • The daily chart indicates that consolidation may be in store in the medium term
  • In the near term, XAU/USD may launch an upward trajectory in the future

Gold prices have been aiming higher over the past 24 hours as the yellow metal struggled to break through the 1872-1886 support area that got its start in mid-February. In general, the yellow metal appears to be in an uptrend. This can be determined by the support rally from August 2021 on the daily chart below.

In the near term, the low resistance from March appears to be steering the XAU/USD pair to the downside. This leaves gold in a position where it may consolidate between converging trendlines. Further gains will put the focus on the 38.2% Fibonacci retracement level at 1922 before the retreating resistance from March begins to emerge.

Conversely, a clearing of the support area would put the focus on the increased support from August and the 61.8% Fibonacci retracement at 1830. A clearing under the latter would expose the 2022 low at 1778 before kicks lower in December 2021 at 1753. A look reveals Looking at the near term horizon, the yellow metal may target upwards in the upcoming sessions.

XAU/USD daily chart

Chart created with TradingView

4 hour chart XAU / USD

On the four-hour chart, gold prices confirmed a Bullish engulfing candlestick pattern XAU/USD tested the 1872-1886 support area. This came on the heels of the positive RSI divergence, which showed lackluster bullish momentum. Prices can break above the 20-period simple moving average (SMA), exposing the 50-period line. This may point to gains in the near term. Such an outcome would put the focus on 38.2% and 61.8% Fibonacci at 1920 and 1949 respectively.

Gold prices are rising, but is there enough momentum for XAU/USD to continue?

Chart created with TradingView

Gold IG Customer Sentiment Analysis – Mixed

look at me IG Client Sentiment (IGCS), about 81% of retailers are net gold. IGCS tends to act as an opposite indicator. Since the majority of traders tend to the upside, this indicates that prices may continue to fall. However, the upside exposure is down 1.73% compared to yesterday. Meanwhile, long bets are up 1.19% from last week. The combination of the general situation and recent changes in directional bets introduces mixed trading bias.

Gold prices are rising, but is there enough momentum for XAU/USD to continue?

* IGCS data usage From 28 Aprily Report

– By Daniel Dobrovsky, strategic for DailyFX.com

To connect with Daniel, use the comments section below or Tweet embed on Twitter

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