Gold Technical Update
Gold edged up higher since our last update, but price was still contained as it failed to break above a declining trendline seen in the daily chart. The RSI also shows respect to 60, which reflects maintenance of the bearish momentum. The daily chart shows a projected ABCDE scenario for a descending triangle. A break below 1640 may be needed to bring on this outlook.
In the 4H chart, we see the market dipping below a rising trendline in the short-term after failing to break above declining trendline from the daily chart. However, the RSI still hasn't broken below 40. If the RSI moves below 40, and price below 1640, we can open up the bearish outlook toward the low near 1528. Upon a pullback, if the market fails to break back above 1650, we can further confirm the bearish outlook in the short term, in context of the medium term triangle seen in the daily chart.
The FOMC meeting at 12:30PM EST, and then the press conference at 2:30PM EST could be risk events the market needs to determine whether to follow through with the reversal to the bearish outlook. If 1640 holds however in the US session, there is a chance the market will attempt to break the declining trendline in the daily chart to the upside and open upper pivots, near-term being 1700, then 1800 being next.
Fan Yang CMT is the Chief Technical Strategist of IBTRADE and FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.