The pair eventually collected enough momentum to dash through this line and the 55– and 100-hour SMAs. As a result, the upper boundary of the short-term was breached to the upside. By Friday morning, the pair had retraced back to the upper channel line.
This factor together with technical indicators suggests that the yellow metal is likely to continue its upward momentum in this session, as well, thus accelerating from the 200-hour . The nearest resistance is set by the five-month high and the weekly R1 at 1,364.97 and 1,367.50, respectively.
Contrary to expectations, the yellow metal was driven by bearish momentum on Friday. Traders were still indecisive during the morning session; however, better-than-expected US employment data added some strength to the overall bearish sentiment thus pushing Gold down to the 1,330.00 mark where it had already found support by Monday morning.
This trading session marks a significant northern resistance which comes from the weekly and monthly PPs and the nearby-located 55-, 100– and 200-hour SMAs near 1,337.50 and 1,343.00, respectively.
Thus, the upside potential for this session could be 1,340.00, while the southern side is guarded by the weekly S1 at 1,322.50. Technical indicators suggest that Gold could spend the day closer to its resistance area.
After testing the bottom boundary of a two-month ascending channel late on Friday, Gold accelerated against the US Dollar, thus dashing through several important resistance areas, including the weekly PP and the 55– and 100-hour SMAs. On Tuesday morning, the rate was testing the upper boundary of a short term channel and the 200-hour SMA circa 1,344.00.
Technical indicators demonstrate that some upside potential still exists in the near term. In addition, the current positioning of the pair suggests that the junior channel should surrender under the bullish pressure, thus allowing the rate to breach the 200-hour SMA and the weekly R1 and approach its six-month high of 1,365.00.
However, given the strength of the nearest resistance, the pair might consolidate for some time.