XAU/USD traded in a quiet mode today, staying slightly above the key support zone of 1493. The metal has been trading in a sideways manner between that barrier and the 1508 hurdle since Monday, and although it stays above the tentative upside support line drawn from the low of May 30th, since August 13th the bulls have been failing to create a higher high. Therefore, we would stay cautious that a corrective decline may be in the works for the short run.
A clear and decisive dip below 1493 may confirm the case for a corrective retreat and may initially pave the way towards the 1475 hurdle, which is marked as a support by the inside swing high of August 6th. If the bears do not give up near that barrier and drive the action below it, then we could see the correction extending towards the aforementioned upside line, or the 1453 area, defined by the inside swing peak of July 18th.
Taking a look at our short-term oscillators, we see that the RSI stands below 50, but has just ticked up, while the MACD lies below both its zero and trigger lines. Both indicators detect negative momentum, but the fact that the RSI ticked up suggests that a small bounce may be looming before a possible negative leg, perhaps for a test near the upper bound of the aforementioned small range, at 1508.
However, we would like to see a strong break above that zone before we abandon the case with regards to a corrective retreat. Such a break could signal that the bulls are interested in driving the metal higher again and may pave the way towards the 1527 area, near the highs of August 15th and 16th. If they are strong enough to overcome that obstacle as well, then we may see them challenging the peak of August 13th, at 1535, which is also the highest since April 2013.
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