Gold: Technical setups remain in favor of sellers
|Gold (XAU/USD) is holding onto the critical $1800 support so far this Wednesday after tumbling toward this level on Tuesday. The short-term outlook for the yellow metal remains bearish, as depicted by the technical charts on different timeframes. Therefore, XAU/USD risks further falls below the $1798 200-DMA, FXStreet’s Dhwani Mehta briefs.
Key quotes
“The yellow metal is set to extend the bearish momentum, in response to the shift in the market’s perception towards the riskier assets. Attention turns towards a batch of critical US economic data and FOMC minutes due on the cards later in the day for fresh cues.”
“Looking at the daily chart, the 14-day Relative Strength Index (RSI) trends in the bearish region but not oversold yet, suggesting that there is more room to the downside. Acceptance below the critical 200-daily moving average (DMA) support at $1798 could trigger a sharp drop towards the May 18 high of $1765. Meanwhile, the bearish bias remains intact so long as the metal stays below the fierce support now resistance at $1850.”
“Gold has confirmed a bear flag breakdown on the hourly sticks earlier in the Asian session. The price now attempts a bounce along with the hourly RSI. But the bulls are likely to face stiff resistance at the confluence of the pattern support and bearish 21-hourly moving average (HMA) at $1808. Further up, the pattern resistance at $1814 could be challenged. To the downside, sellers will aim for the measured target at $1777 on a breach of the crucial support around $1800-$1798 levels.”
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