Gold Price Analysis: Bulls head towards a monthly 50% mean reversion

XAU/USD is moving deeper into resistance territory.
Bears are watching for the formation of bearish structure.

Ross J Burland FXStreet

Gold remains in the hands of the bulls, but there are prospects of a correction to the downside.

The following is a top dow analysis that illustrates the market structure and potential outcomes.

Monthly chart

The monthly chart shows the price is meeting a critical resistance zone.

Weekly chart

The weekly chart shows that the price is meeting a 38.2% Fibonacci level and the focus is on the prior resistance structure that would be expected to act as support on the downside.

Daily chart

However, there is a daily support structure that may thwart the weekly bearish outlook.

Given the support, then there is a focus on the upside for the meanwhile to target prior structures.

A 50% mean reversion is in focus which has a confluence with the prior structures looking left.

1-hour chart

The 1-hour chart shows the price breaking the trendline and testing support.

A break of support opens downside risks to the prior structure.

15-chart

The 15-min chart shows prospects of a break of resistance that could trigger an upside extension.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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