Gold (XAU/USD) retreats to the $1,650 area. A break below $1,642 would clear the way towards the $1,620-$1,615 region, FXStreet’s Haresh Menghani reports.
The $1,662 area should now act as a pivotal point for gold
“A sustained strength beyond the $1,662 area, which coincides with the 38.2% Fibonacci retracement level of the recent fall from the monthly peak, could trigger a fresh bout of a short-covering move and lift spot prices to the $1,676-$1,678 supply zone. The latter comprises 50% Fibo. level and the 100-period SMA on the 4-hour chart, which if cleared decisively will suggest that the XAU/USD has formed a near-term bottom. This, in turn, will set the stage for a further near-term appreciating move and allow bulls to aim back to reclaim the $1,700 round-figure mark.”
“The 23.6% Fibo. level, around the $1,642 area, now seems to protect the immediate downside. Any subsequent decline might continue to find support near the $1,620-$1,615 region or the YTD low. A convincing break below will be seen as a fresh trigger for bearish traders and drag gold towards the $1,600-$1,590 area. Some follow-through selling should pave the way for an extension of the downward trajectory towards the $1,567-$1,565 intermediate support en route to the $1,530-$1,528 region and the $1,500 psychological mark.”
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