Gold Price Analysis: XAU/USD's daily chart shows temporary uptrend exhaustion
- Gold's daily chart shows a bearish divergence of the MACD, a sign of uptrend exhaustion.
- A break below the 10-day SMA could prove costly.
Gold is sidelined around $1,809 per ounce at press time with the daily chart MACD histogram, an indicator used to identify trend changes and trend strength, reporting a bearish divergence.
A bearish divergence occurs when an indicator prints a lower high, contradicting a higher high on price and is reflective of buyer exhaustion.
As such, the metal looks vulnerable to price pullback. Moreover, the bearish divergence of the MACD would remain valid as long as prices are held below the recent high of $1,818.
The immediate support is seen at $1,795 (10-day simple moving average). Acceptance under that support line could cause some buyers to exit the market, leading to a deeper pullback. This is because sellers have failed multiple times to establish a strong foothold below the 10-day simple moving average in the last four weeks.
On the higher side, $1,818 is the level to beat for the bulls.
Daily chart
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Trend: Buyer exhaustion
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
