Gold Price Analysis: XAU/USD breaks out of the current chart formation it is up to the bulls to keep the momentum going
- Gold is trading 0.88% higher on Monday as the dollar struggles.
- There has been a trendline break that could lead to a continuation of the trend.
Gold 4-hour chart
Gold has moved out of a sticky zone between USD 1940 and USD 1915 per troy once to break the downward sloping trendline marked in black. Now above the current price level, there are two key zones for the bulls to break if the all-time high is to be tested once again.
The purple box on the chart represents the bottom and top of the next resistance zone. The bottom of the area is at USD 1992.42 per ounce and the top is at USD 2016.55 per ounce. Obviously in the middle of these levels lies the USD 2K per ounce psychological level.
Both indicators have recently turned bullish too. The MACD histogram is above the zero line and the signal lines have also moved above the mid-level too. The Relative Strength Index has broken above the 50 level, which is also a positive sign.
Overall it is clear the price is still in an uptrend on the higher timeframes. This 4-hour chart represents the consolidation area after the price hit an all-time high in August. Every time the dollar drops off the bulls regain control but interestingly when there is strength in the greenback the green zone at the bottom of the chart holds. Leading into the election next month and this weeks FOMC meeting the price of gold could get more volatile and it seems investors are positioning at the moment. If the price pushed past the purple zone it would be reasonable to expect the high of USD 2075.32 per ounce to be tested again.
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Additional levels
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.
