Gold Price Analysis: Eyes re-test of the 2020 high on pennant breakout

Gold's daily chart shows a pennant breakout, a bullish continuation pattern.
The metal could challenge the January high of $1,611.

Omkar Godbole FXStreet Contributor

Gold jumped 1.32% on Tuesday, confirming an upside break of the six-week-long narrowing price range or the pennant pattern on the daily chart.

The breakout indicates the rally from November lows near $1,445 has resumed. Tuesday's close also invalidated the bearish lower high of $1,593.90 established on Feb. 3.

Additionally, the 5- and 10-day averages are trending north, indicating a strong upward momentum and the relative strength index has breached the descending trendline in favor of the bulls.

All in all, the metal looks set to test the 2020 high of $1,611 reached on Jan. 8. The bullish case would be invalidated if prices find re-enter the pennant pattern with a drop below $1,580.

At press time, an ounce of gold is changing hands at $1,603.

Daily chart

Trend: Bullish

Technical levels

XAU/USD

Overview
Today last price	1603.62
Today Daily Change	0.84
Today Daily Change %	0.05
Today daily open	1602.78

Trends
Daily SMA20	1573.17
Daily SMA50	1541.84
Daily SMA100	1511.52
Daily SMA200	1469.31

Levels
Previous Daily High	1605.15
Previous Daily Low	1580.95
Previous Weekly High	1584.36
Previous Weekly Low	1561.99
Previous Monthly High	1611.53
Previous Monthly Low	1517.1
Daily Fibonacci 38.2%	1595.91
Daily Fibonacci 61.8%	1590.19
Daily Pivot Point S1	1587.44
Daily Pivot Point S2	1572.09
Daily Pivot Point S3	1563.24
Daily Pivot Point R1	1611.64
Daily Pivot Point R2	1620.49
Daily Pivot Point R3	1635.84

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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