Gold Price Analysis: XAU/USD bulls challenge 100-SMA after triangle breakout
- XAU/USD confirms symmetrical triangle breakout on the 4H chart.
- Acceptance above 100-SMA is critical to unleashing further upside.
- 200-SMA at $1863 is the next upside target amid bullish RSI.
Gold (XAU/USD) has caught a fresh bid-wave in early Europe following a brief consolidation, as the bulls look to conquer $1850, as the recovery from two-month lows gathers steam.
Broad-based US dollar weakness amid the revival of the reflation trades on increased prospects of the US $1.9 trillion stimulus package, continues to favor the XAU bulls. Gold is considered a hedge against inflation and currency debasement.
From a short-term technical perspective, gold’s outlook appears constructive after a symmetrical triangle breakout was confirmed on the four-hour chart.
Despite the upside break, the gold bulls need to find acceptance above the horizontal 100-simple moving average (SMA) at $1843.
Gold prices are likely to see a sharp rise towards the 200-SMA of $1863 on a sustained move above the powerful 100-HMA barrier.
The relative strength index (RSI) points north above the 50.00 level, suggesting that the bullish bias remains intact.
Alternatively, strong support near $1835 could limit any pullbacks. That level is the confluence of the triangle resistance now support and 50-SMA.
Sellers would then gear up for a drop towards $1818, the pattern support.
Gold Price Chart: Four-hour chart
Gold Additional levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
