Gold technical analysis: Looking to retest key support before capitalizing on continuation breakout

Gold's daily chart shows a pennant breakout.
Prices will likely bounce from key support at $1,439, reinforcing the bull view.

Omkar Godbole FXStreet Contributor

Gold is currently trading at $1,443 per Oz, having hit a fresh 2019 high of $1,452.

The yellow metal is trimming gains, possibly due to overbought conditions reported by the hourly and 4-hour chart indicators and the pullback could be extended further to the former resistance-turned-support of $1,439 (June 25 high).

With the 14-day relative strength index of 67.00 signaling a room for the rally, the crucial support at $1,439 will hold, reinforcing the bullish view put forward by the pennant breakout on the daily chart.

A pennant breakout indicates a resumption of the rally from the May 21 low of $1,261. As a result, $1,500 could come into play over the next few weeks.

The short-term bullish case would be invalidated if prices drop below the June 17 low of $1,400. That could happen if the U.S. Federal Reserve surprises markets by keeping rates unchanged on July 31.

Markets are full-priced for a 25 basis point rate cut.

Daily chart

Trend: Bullish

Pivot point

1. R3 1491.01
2. R2 1469.55
3. R1 1457.87
PP 1436.41
1. S1 1424.74
2. S2 1403.28
3. S3 1391.6

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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