Morning Market Update – XAU/USD

Gold continues to trade negatively on the four-hour chart, but has reached a strong support area. Technically, a bounce back is likely because the resistance is located in the buyer’s territory. The price pattern maintains a bullish perspective after the breakout from the red descending area.

If the support holds, we might be having a buying opportunity from here. The next upward targets will be at the 1268.92 level and higher at the 1274 area.

The stochastic lines have posted a bull cross and are tracking higher. The market has also decisively taken the initial support at 1256.37 which now means that a new trend is in formation. The next test is at 1268.92. This is near an old pivot level in place for much of the time in recent sessions which has seen a series of turning points and plenty of consolidations. Furthermore, this is around the underside resistance of the old uptrend.

It would be a considerable scalp for the bulls to close consistently above this level which would subsequently open the next pivot around 1269. The four hourly chart shows strong near term momentum, a sequence of higher resistance now becoming supportive. Gold price declined clearly on last Friday to test the key support 1256.37,

keeping its stability above it, accompanied by stochastic reach to the oversold areas, providing positive motive that we are waiting to assist to push the price to resume the main bullish trend again.

In general, holding above the mentioned support keeps the bullish trend scenario valid on the intraday and short term basis, and the targets begin at 1268.92 and extend to 1274.00, noting that breaking 1274.56 will push the price to rise towards 1287.08 directly.

Expected trading range for today is between 1256.37 support and 1268.92 resistance.

Expected trend for today: Bullish
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