Gold: Technical set up backs the case for the upside

FXStreet Team FXStreet

Gold (XAU/USD) closed above $1950 on Wednesday, having staged a solid comeback from just above the $1900 mark. So far this Thursday, the yellow metal has slipped below $1950 and is now testing the $1938 support.

Key quotes

“As it is all about the Powell speech on Thursday, the powerful 21-hourly Simple Moving Average (HMA), currently at $1938, is seen offering immediate support to the gold bulls.”

“A break below which the horizontal 100-HMA at $1934 will be tested. Should the bulls fail to defend the latter, the next cushion awaits at the 50-HMA of $1931. Selling pressure will accelerate on a breach of the last, with Wednesday’s low of $1903 back on the sellers’ radar. If Powell turns out to be less dovish, the metal could extend its decline towards the August 12 low of $1863.”

“To the upside, recapturing of the horizontal 200-HMA at $1952 is critical to re-enforce the bullish momentum. Note that the prices closed above the 200-HMA on Wednesday, having formed a bullish engulfing candle on the daily chart – a bullish reversal indication. Further north, August 24 highs at $1961 will be tested. Acceptance above the latter will open doors towards the $2000 mark.”

“The hourly Relative Strength Index (RSI) has turned upwards while above the midline, suggesting more room to the upside.”

Author

FXStreet Team

FXStreet

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