- Gold is likely to open next with gains targeting 1,940 if the 50 SMA resistance is broken.
- An ascending parallel channel and the 100 SMA work hand in hand, providing short term support.
Gold closed the week's trading at 1,900 after a minor correction from the weekly high at 1,914. The precious metal has gradually sustained a bullish price action within an ascending parallel channel. In September, support was embraced roughly at 1,860. On the other hand, the channel's resistance limits upward movements.
A monthly high traded slightly above 1,930, marking gold's most significant resistance zone. The 4-hour chart displays a bullish outlook for XAU/USD. For instance, the 100 Simple Moving Average provides immediate support in conjunction with the ascending channel's lower trendline.
XAU/USD 4-hour chart
Simultaneously, the Relative Strength Index (RSI) emphasizes the bullish scenario as it reaches out towards the midline. The action above the average would most likely encourage more buy orders, creating more volume supporting the bullish outlook.
On the upside, if the 50 SMA resistance is overcome, gold is expected to launch the recovery to 1,940. Traders must be aware that some buying pressure would be absorbed at 1,920 and the monthly high. Trading above the channel resistance might result in the ultimate liftoff to 2,000.
It is worth mentioning that gold's bullish outlook may be invalidated if the 100 SMA and the channel's support are shattered. In this case, support at 1,880 will come in handy. However, extended losses will seek refuge at 1,860 (September's support).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.