Gold Technical Update

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XAU/USD (Gold)



Gold was unable to break triangle support, but continued to respect triangle resistance this week. As we start the last trading session (US session), gold is nearing the apex of the triangle seen in the daily chart. Let's examine a couple of possibilities.

The count suggests a completed 5-wave (ABCDE) triangle. According to Elliott Wave Principles, this reflects a completed consolidation pattern, and a bullish continuation can take place. However the candlestick combination in the daily chart this week suggests some near to short-term bearish intent as the bearish candles dominated the bullish ones. A bearish projection first sees the 1666.45 pivot as support. Below that we are looking at 1628, and the 200day simple moving average.

However, failure to break below triangle, and a rally back above 1750 could be a sign of bullish continuation, with the first target to 1800 near the 1802 pivot. Above that, we open up the record high near the 1900-1910 area.

The 1H chart shows a market with bearish momentum as the RSI reading fails to break above 60, but is able to tag 30. The bullish scenario is shelved until we can push the RSI back above 60, and then 70. The bearish scenario would gain more strength if the market breaks below 1700, and then fail to pull back above the lows near  1705.


Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.