Morning Market Update – XAU/USD

Gold found some strong resistance at this point of time breaking above 1269.22 and has since then seen a decline. A break of 1263.42 support shall confirm there is a change in the momentum. Rise has been completed at 1269.22 after failing to breach resistance zone. Initial bias stays on the downside in the upcoming periods. Sustained trading below 50 day EMA will target 1254.6 support and below. But we’d expect strong support from 1252.86 to contain downside and bring rebound as the support zone aligns with the 50EMA.

Looking at the bigger picture, a decline from current levels is expected to continue while the resistance is getting stronger. Decisive rejection there will carry long term bearish implications and pave the way to the downside. In case the sideway pattern from current levels extends, we’d be looking for strong support to contain downside.

It remains to be confirmed as the whole down trend from current levels has begun at 1269.22 already, but there is no confirmation yet. But in any case, a firm break of 1263.42 would pave the way to 1252.86. And with that, the 55 month EMA will be firmly taken out which suggests that price actions from the MA is indeed a sideway pattern.

The gold recovery has been temporarily stopped from further gains. Stochastic are tracking higher. The market has also decisively found initial resistance at 1269.22 which now means that a new trend is in formation. The next test is at 1263.42. This is the old pivot level in place which has seen a series of turning points and numerous consolidations. Furthermore, this is around the underside resistance. It would be a considerable scalp for the bear to close consistently below our levels, which would subsequently open the next pivot around 1252.86. The four-hourly chart shows strong near term momentum, a sequence of higher resistance now becoming stronger.

Gold price was unable to break the upward level and has been trading below it, which puts the price under potential negative pressure on the intraday basis, targeting testing level initially, and it might extend to reach the key support before attempting to regain the main bullish trend again.

Therefore, the bearish bias will be suggested temporarily in the upcoming sessions unless the price managed to breach 1269.22 level and hold above it, as this breach is required to confirm resuming the main bullish trend that its next target located at 1287.08.

Expected trading range for today is between 1254.6 support and 1271.82 resistance.

Expected trend for today: Bearish
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