Gold Price Analysis: XAU/USD bulls eye $1940 despite overbought conditions
- Gold is off weekly tops but holds gains above $1930.
- Overbought conditions on the 4H chart warrant caution for the bulls.
- $1940 and $1950 still remain on the buyers’ radars.
Gold (XAU/USD) holds the higher ground near eight-day tops of $1935, as the bulls gather pace for the next push to the upside.
As observed in the four-hour chart, gold confirmed a symmetrical triangle breakout on the final trading day of the year 2020.
Gold Price Chart: Four-hour
The bulls built onto Thursday’s upside break, extending the upbeat momentum into the first trading day of 2021.
The precious metal has rallied as much as $20 so far, with room for additional upside despite the Relative Strength Index (RSI) trending in the overbought zone, at the momentum.
The measured pattern target is aligned at $1940, above which the $1950 psychological barrier could come into the picture.
Alternatively, the confluence of the 21-simple moving average (SMA) and pattern resistance at $1893 will act as strong support.
The next relevant downside barrier is seen at $1883, the intersection of the 50-SMA and pattern support.
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.
