Gold Price Analysis: XAU/USD breaks through a symmetrical triangle resistance


  • Gold edged higher for the third consecutive session on Wednesday.
  • A move beyond a symmetrical triangle sets the stage for further gains.
  • Dip-buying should now help limit the downside near the $1900 mark.

Gold built on the previous day's modest bounce from a two-week-old ascending trend-line support and climbed to over one-week tops on Wednesday. Bulls might now be looking to build on the momentum beyond a descending trend-line resistance, extending from highs touched on August 18.

The combination of trend-lines constituted the formation of a symmetrical triangle on short-term charts, pointing to indecision over the commodity's near-term trajectory. However, the fact that the XAU/USD has managed to break through the triangle resistance, the bias now seems tilted in favour of bullish traders.

Meanwhile, technical indicators on the daily chart have just started moving into positive territory and add credence to the constructive outlook. Hence, a subsequent move back towards monthly swing highs, around the $1933 region, now looks a distinct possibility. The momentum could further get extended towards the $1961-63 supply zone.

On the flip side, the triangle resistance breakpoint, around the $1918-17 region, now seems to act as immediate support and is closely followed by the $1908 level. Any subsequent slide might now be seen as an opportunity to initiate fresh bullish positions. This, in turn, should help limit the downside near the $1900 round-figure mark.

XAU/USD 4-hourly chart

fxsoriginal

Technical levels to watch

XAU/USD

Overview
Today last price 1918.5
Today Daily Change 12.28
Today Daily Change % 0.64
Today daily open 1906.22
 
Trends
Daily SMA20 1895
Daily SMA50 1924.78
Daily SMA100 1875.07
Daily SMA200 1756.53
 
Levels
Previous Daily High 1914.18
Previous Daily Low 1894.7
Previous Weekly High 1933.3
Previous Weekly Low 1882.46
Previous Monthly High 1992.42
Previous Monthly Low 1848.82
Daily Fibonacci 38.2% 1906.74
Daily Fibonacci 61.8% 1902.14
Daily Pivot Point S1 1895.89
Daily Pivot Point S2 1885.55
Daily Pivot Point S3 1876.41
Daily Pivot Point R1 1915.37
Daily Pivot Point R2 1924.51
Daily Pivot Point R3 1934.85

 

 

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