Gold Price Forecast: XAU/USD remains vulnerable, downside favored
|Gold is alternating between gains and losses so far this Tuesday amid a recovery in the risk sentiment. Focus remains on yields as XAU/USD eyes a pennant breakout, FXStreet’s Dhwani Mehta reports.
Gold is teasing a pennant breakout on the 4H chart
“Fed Chair Jerome Powell’s testimony on the CARES act, Evergrande updates and the dynamics in the Treasury yields will play out, impacting gold price action.”
“As observed on the four-hour chart, XAU/USD is wavering in a pennant formation, with a breakout expected in either direction in the session ahead. With the Relative Strength Index (RSI) still lurking below the midline, the odds of a downside breakout from the pennant look higher.”
“A powerful resistance awaits at $1754, which could emerge as a tough nut to crack for gold bulls. Acceptance above the latter is needed to rekindle a fresh upswing towards the 50-SMA at $1759. The next relevant upside target is seen at the September 23 highs of $1777.”
“Gold sellers look to challenge the rising trendline (pennant) support at $1747. A sustained break below the latter will validate the pennant breakdown, opening floors for a retest of the six-week troughs of $1738, below which the falling trendline support at $1735 would be put to test.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.