Previous: Gold Looking for Price and Momentum Breakout from Consolidation (2/14)
XAU/USD (Gold)
The declining wedge consolidation pattern that started forming at the beginning of February has been broken to the upside. The 4H chart shows that the price action so far this week is pushing above the declining trendline and pushing the RSI above 60. Market is also moving above the cloud of moving averages seen in the 4H chart. These are all bullish continuation signs.
The 1763-1764 level is a previous pivot that has provided resistance. If gold climbs above 1764, it opens up an attack toward 1800-1802.31, which provided resistance 11/8/2011. Looking at the RSI, the daily reading has returned above 70 after kissing 30, so the market in the medium term is sideways to bullish. Expect resistance as it nears 1800, at least for a throwback to to test the 1760 area as support.
Fan Yang CMT is a forex trader, analyst, educator and main contributor for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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