Gold Technical Update
Gold has been in a bullish correction since the beginning of October after the precipitous slide during September. The bullish correction has taken an ABC structure. The market is starting the week bullish as it pushes above last week's high and extending the C wave above equality with wave A. At the same time, we see price action cracking the resistance cluster of 61.8% retracement and support pivots seen 9/15-9/21, which would now be tested as resistance. The RSI is also at 60, a break above which suggests a return of bullish momentum, while a break back above 70 would confirm it.
Looking at the 1H chart, a break below then rising channel then clearing 1743 would be the first signs that the gold market completed an ABC correciton. If the RSI is also pushed below 40, we can say bullish momentum is lost.Then the 1720-1725 area would be another level of support to monitor. A break below this opens up the 1680 November low.
However, if the US session extends the rally, our next resistance could be near 1837.56, 78.6% retracement. When looking at daily, 4H and 1H charts, we see that gold trading above their respective 200 period moving averages, and the RSI readings in these different time-frames all show bullish bias.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.