Gold entered a minor period of consolidation late on Friday, as a move below the 1,342.00 was restricted by the 55– and 100-hour SMAs. The same situation was apparent on Monday.
This shows that traders are rather indecisive. On the one hand, bulls are unable to push the yellow metal above the 1.350.00 mark, while the aforementioned support, also reinforced by the nearby 200-hour moving average, limits the beginning of a new wave down.
Technical indicators demonstrate that the pair should move north today towards the senior channel and the monthly R1 at 1,362.50 and 1,365.00, respectively. However, the 2017/2018 high which is located at 1,366.30 is unlikely to be reached in this session.
The yellow metal has been trading below the 1,350.00 mark for the third consecutive session. Together with an upward-sloping trend-line, the pair has formed a minor ascending triangle.
The diminishing trading range within this pattern suggests that a breakout should occur soon. Technical indicators flash bullish signals. In line with this scenario, Gold should breach its three-day resistance and approach the senior channel at 1,362.50.
On the other hand, bears might take advantage of bulls’ inability to push the pair above the 1,350.00 level. They could move the rate past the 200-hour SMA and towards the 1,335.00 area where the 23.60% Fibonacci retracement and a medium-term channel are located.