Gold has limited downside room unless it breaks $1,900
Gold price appears well set to print the first weekly loss in three as it defends the previous Friday’s U-turn from a key resistance line below the important Exponential Moving Averages (EMAs). However, the 50-EMA pierces the 200-EMA from below and prints a “Golden Cross” bullish moving average crossover suggesting a corrective bounce in prices. Additionally, the RSI (14) also rebounds from the oversold territory and hence increases the odds of witnessing a corrective bounce towards the EMA convergence surrounding $1,930. Following that, the 50% Fibonacci retracement of the July-August downturn, near $1,937, may please the XAUUSD buyers before testing them with a seven-week-old descending resistance line surrounding $1,950. Adding strength to the stated trend line resistance is the 61.8% Fibonacci retracement, also known as the “Golden Fibonacci Ratio”.
Meanwhile, the Gold buyer’s failure to defend Thursday’s corrective bounce needs to break $1,915 support to recall the sellers. Even so, a horizontal area comprising multiple levels marked since late June, close to $1,900, appears a tough nut to crack for the XAUUSD bears afterward. It should be observed, though, that a clear downside break of $1,900 won’t hesitate to challenge the previous monthly low of around $1,884 while targeting the early March swing high of around $1,858 and then to the yearly bottom of $1,804, quickly followed by the $1,800 round figure.
To sum up, the Gold price remains on the bear’s radar despite the latest recovery.
Meanwhile, the Gold buyer’s failure to defend Thursday’s corrective bounce needs to break $1,915 support to recall the sellers. Even so, a horizontal area comprising multiple levels marked since late June, close to $1,900, appears a tough nut to crack for the XAUUSD bears afterward. It should be observed, though, that a clear downside break of $1,900 won’t hesitate to challenge the previous monthly low of around $1,884 while targeting the early March swing high of around $1,858 and then to the yearly bottom of $1,804, quickly followed by the $1,800 round figure.
To sum up, the Gold price remains on the bear’s radar despite the latest recovery.