Gold seeks to pivot near trendline, bulls still in charge [Video]
|Gold reversed south to seek support near an ascending trendline after last week’s bullish action waned marginally below the 1,800 level.
The technical indicators reflect that the bulls remain in charge despite the latest negative correction. The red Tenkan-sen line keeps deviating above the blue Kijun-sen line, while the RSI, although weaker, holds comfortably above its 50 neutral mark. Likewise, the MACD has lost steam, but its upward direction is still intact within the positive area. Notably, the progressing bullish cross between the 20- and 50-day simple moving averages (SMAs) is adding to the trend reversal optimism triggered by the double bottom structure created near the 1,676 number.
Should the trendline stand firm at 1,773, the price may attempt to pierce the 1,800 hurdle and crawl above the Ichimoku cloud. Next, the 50% Fibonacci retracement of the 1,959 – 1,676 downfall could immediately set a trap at 1,818 before all attention turns to the 200-day SMA and the top line of the descending channel currently seen near the 61.8% Fibonacci of 1,869.
If the floor around the trendline collapses, the bears will head to evaluate the credibility of the bullish double bottom pattern within the 1,756 – 1,743 region formed by the structure’s neckline and the 23.6 Fibonacci. The 20- and 50-day SMAs could also guarantee any drop lower. However, if they fail to act, the door will open for the 1,720 mark, where any violation could dip the price to 1,676.
Summing up, gold’s short-term bias remains skewed to the upside. A sustainable rebound near the trendline is expected to boost positive sentiment. Otherwise, a decline below 1,743 could raise selling appetite.
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