Gold Price Analysis: RSI failure swing suggests some near-term relief after $1700 provides support

Gold is 0.19% lower on Wednesday but the USD 1700 level has stemmed losses.
There is a technical indication that a short term pullback is on the horizon.

Rajan Dhall, MSTA FX Daily

Gold 4-hour chart

Gold has been moving lower in recent sessions as the risk-on environment gathers momentum. Yesterday the companies worst-hit by COVID-19 recovered somewhat as airlines/travel and banks outperformed even the tech sector. This shows that the bounce-back might be becoming more broad-based. This had negative connotations for the safe-havens including gold which moved even further into the red and on Wednesday the precious metal attacked USD 1700 per troy ounce.

Looking closer at the chart, the price has bounced off the aforementioned USD 1700 level. This level also matches up quite nicely with the 23.6% Fibonacci zone. The good news does not stop there as the Relative Strength Index (RSI) indicator also moved into an oversold area. The price waves have made a few wave lows now but in comparison to some of the prior ones, the RSI does not warrant being in oversold territory. This is called a bullish failure swing and is considered a positive sign. This does not always indicate that the trend will move back higher but it might offer a short term reprieve.

The next resistance is the wave low from the first lower high lower low pattern at USD 1739.04. If this levels (marked in red) is breached to the upside then the uptrend might be back on. If it is rejected then the price could move to lower levels and a decent support level is the 38.2% Fibonacci zone.

Additional levels

XAU/USD

Overview
Today last price	1707.23
Today Daily Change	-3.81
Today Daily Change %	-0.22
Today daily open	1711.04

Trends
Daily SMA20	1716.43
Daily SMA50	1671.32
Daily SMA100	1629.66
Daily SMA200	1561.83

Levels
Previous Daily High	1735.69
Previous Daily Low	1709.09
Previous Weekly High	1765.38
Previous Weekly Low	1717.34
Previous Monthly High	1747.82
Previous Monthly Low	1568.46
Daily Fibonacci 38.2%	1719.25
Daily Fibonacci 61.8%	1725.53
Daily Pivot Point S1	1701.52
Daily Pivot Point S2	1692.01
Daily Pivot Point S3	1674.92
Daily Pivot Point R1	1728.12
Daily Pivot Point R2	1745.21
Daily Pivot Point R3	1754.72

Author

Rajan Dhall, MSTA

FX Daily

Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.

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