Gold Price Analysis: XAU/USD challenges 50-HMA on the road to recovery towards $1700
- Gold is set to regain the $1700 mark as short-term indicators favor the bulls.
- RSI has edged higher, piercing above the midline.
- XAU bulls target the falling wedge hurdle at $1703.
Gold (XAU/USD) looks to extend its recovery from nine-month lows of $1677, heading into the European session this Tuesday, having found solid bids around the $1685 region.
At the time of writing, gold is wavering within a potential two-week-old falling wedge formation, challenging the bearish 50-hourly moving average (HMA) at $1694.
An hourly candlestick closing above that level could boost the renewed upside, calling for a test of the powerful hurdle at $1703. That level is the intersection of the downward-sloping 100-HMA and falling trendline resistance.
Acceptance above the critical resistance could validate a falling wedge breakout, opening doors for a test of the bearish 200-HMA at $1727.
The Relative Strength Index (RSI) edges higher above the midline, suggesting that there is extra scope for the recovery.
Gold Price Chart: One-hour
Alternatively, the 21-HMA at $1686 offers an immediate cushion, below which the falling trendline support at $1673 could be put at risk.
A sharp sell-off towards the $1650 psychological level cannot be ruled out if the bulls fail to resist above the June 2020 low near $1670.
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.
