Gold technical analysis: Eases back toward 1,800 after advances curbed

Anthony Charalambous, CFTe XM

Gold is currently at the red Tenkan-sen line at 1,811 looking set to continue the road to the 1,800 mark, after positive developments were halted by the 50-day simple moving average (SMA) and the July 15 high of 1,834. The converging SMAs are not conveying any definitive price bearing and thus are feeding a sideways trajectory.

Furthermore, the horizontal Ichimoku lines are indicating that directional impetus is lacking, while the short-term oscillators are endorsing the commodity’s attempt to push lower. The MACD and the red trigger line are drifting ever so slightly beneath the zero threshold, while the RSI has just pierced below the 50 level. The fresh negative charge of the stochastic oscillator, is promoting the bearish tone in the precious metal.

To the downside, if the price pushes clearly under the red Tenkan-sen line at 1,811, a tough support zone could arise from the 100-day SMA at 1,802 until the 1,789 obstacle. Should sellers manage to steer below this region, which is storing multiple lows, the yellow metal may then dive to challenge the base of 1,750-1,760, formed by the troughs on April 29, June 18 and 29. In the event downward pressures gain significant power, the support border of 1,715-1,727 could then come into play.

If buyers re-emerge and nudge the price back above the red Tenkan-sen line, a durable resistance section from the 200-day SMA at 1,820 up until the 1,834 high, could suppress freshly materialized upward forces. However, if buyers successfully conquer the Ichimoku cloud’s upper surface around 1,834, they may then meet the nearby 1,844-1,855 resistance border, formed by inside swing lows formed in the first half of June. Overstepping this aforementioned boundary and the neighbouring 1,870 barrier too, may bolster the bulls’ beliefs into lifting the commodity back to the 1,900 frontier.

In conclusion, gold is currently consolidating in the near-term. For a stronger price direction to evolve, the price would need to thrust either below 1,789 or above 1,834.

Author

Anthony Charalambous, CFTe

Anthony Charalambous joined XM in 2019 and specializes in preparing daily technical analysis, using his years of trading experience to provide detailed forecasting for all major asset classes such as forex, indices, commodities and equities.

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