Gold Hits Resistance Near 1325
|XAU/USD traded higher on Friday, breaking above the resistance (now turned into support) zone of 1315. That said, the advance was paused during the Asian morning today near the 1325 barrier, which provided decent resistance on January 31st, as well as on May 11th, 2018. Overall, the precious metal continues to trade above the medium-term uptrend line drawn from the low of November 13th and thus, we would consider the outlook to be positive for now.
A decisive break above 1325 would confirm a forthcoming higher high on both the 4-hour and daily charts and may initially pave the way towards the 1333 zone, marked by the peak of April 24th, also near the inside swing lows of the 12th and 13th of that month. Now, if that level fails to stop the price from drifting higher, then we may experience extensions towards our next resistance zone, at around 1341.
Taking a look at our short-term momentum indicators though, we see that the RSI has slowed down slightly below its 70 line, while the MACD, although above both its zero and trigger lines, shows slowdown signs as well. These indicators suggest that a small setback may be looming soon before, and if, the bulls decide to take charge again.
However, even if the precious metal pulls back, as long as such a setback stays limited above the aforementioned uptrend line, we would treat it as a corrective move. We would like to see a clear dip below 1303 before we start leaning towards the bearish side. Such a move could confirm the break below the uptrend line and would also signal a forthcoming lower low. The bears may then be encouraged to drive the battle towards the 1296 zone, which acted as a strong resistance during the first half of January. Another move lower, below 1296, could carry more bearish implications, perhaps paving the way towards the 1286 territory, defined by the inside swing high of January 23rd.
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