Gold Price Analysis: Range play continues, focus on Bollinger bands

Gold's hourly chart shows a Bollinger band squeeze.
The direction of the range breakout will likely set the tone for the next move in the yellow metal.

Omkar Godbole FXStreet Contributor

Gold's sideways churn in the range of $1,630 to $1,610 continues for the third day. With the decline in the price volatility, the Bollinger bands have narrowed.

Bollinger bands are volatility indicators placed two standard deviations above and below the price's 20-day moving average. A low-volatility period often paves the way for a big move on either side.

The focus, therefore, is on the upper and lower bands currently located at $$1,626 and $1,612, respectively. An hourly close above the upper band would imply a range breakout and open the doors to a test of recent highs above $1,640. Alternatively, a range breakdown would expose the support at $1,594.

The latter looks likely as the 4-hour chart relative strength index is reporting a bearish divergence. Also, the dollar index, which tracks the value of the US dollar against majors, is flashing green near99.38, having bounced up from 98.30 on Monday.

Hourly chart

Trend: Neutral

Technical levels

XAU/USD

Overview
Today last price	1614.79
Today Daily Change	-7.77
Today Daily Change %	-0.48
Today daily open	1622.56

Trends
Daily SMA20	1593.57
Daily SMA50	1589.94
Daily SMA100	1543.41
Daily SMA200	1510.31

Levels
Previous Daily High	1636.13
Previous Daily Low	1611.74
Previous Weekly High	1644.54
Previous Weekly Low	1482.74
Previous Monthly High	1689.4
Previous Monthly Low	1547.56
Daily Fibonacci 38.2%	1621.06
Daily Fibonacci 61.8%	1626.81
Daily Pivot Point S1	1610.82
Daily Pivot Point S2	1599.09
Daily Pivot Point S3	1586.43
Daily Pivot Point R1	1635.21
Daily Pivot Point R2	1647.87
Daily Pivot Point R3	1659.6

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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