Gold technical analysis: Falling channel breakout confirmed, but resistance at $1,518 still intact
- Gold's daily chart shows a falling channel breakout.
- A break above $1,518 is needed for bullish reversal confirmation.
Gold jumped 1.11% on Thursday, confirming an upside break of the falling channel, represented by trendlines connecting Sept. 4 and Sept. 25 highs and Sept. 10 and Oct. 1 lows.
The channel breakout indicates the pullback from the September high of $1,557 has ended. The outlook, however, would turn bullish once the yellow metal invalidates the bearish lower highs setup with a move above the Oct. 25 high of $1,518.
As of writing, Gold is trading largely unchanged on the day at $1,512 per Oz.
The resistance at $1,518 could be scaled as Thursday's breakout is backed by a bullish or an above-zero reading on the MACD histogram and an above-50 reading on the 14-day relative strength index (RSI). A close above $1,518 would open the doors for $1,536 (Sept. 24 high).
The outlook would turn bearish if the recent low of $1,474 is breached. The downside was consistently restricted in $1,474-$1,477 range in the second half of October.
Daily chart
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Trend: Bullish
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.
