Morning Market Update – XAU/USD

Gold moved lower towards 1267.95 and found support, bouncing back from the levels after falling from the strong rally.

Gold price eased to 1267.95 so far, after gaining some momentum to regain the peak in early trading, eyeing a cluster of supports below.

Overall bullish structure sees 1278.16 resistance as an ideal reversal point before the final attempt towards the key barrier at 1282.

However, a deeper correction cannot be ruled out as the strong pressure on the dollar on geopolitical tensions is easing, while there seems to be plenty of room at the downside.

The gold recovery continues to make ground amidst the renewed dollar weakness. The uptrend has been decisively found support and confirmed now, whilst momentum indicators are all now in solid recovery mode. The Stochastic are rising and shall look towards tracking higher. The market has also decisively broken the initial resistance at 1269.35 which now means that a new trend is in formation. The next test is at 1278.16. This is the old pivot level in place for much of the year 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 bulls to close consistently above 1278.16, which would subsequently open the next pivot around 1269. The four hourly chart shows strong near term momentum, a sequence of higher lows and the old 1269.35 resistance now becoming supportive.

Gold price rising at the minor bullish channel’s support line that appears on chart, to start the attempts to rebound bullishly and resume the main bullish trend, as the price gets positive signal through stochastic, to reinforce the chances of rising today.

Therefore, we will continue to suggest the overall bullish trend unless breaking 1267.95 level and holding below it, as the positive effect of the inverted head and shoulders’ pattern still active, waiting to target 1278.16 followed by 1282.00 levels mainly areas before any new attempt to rise.

Expected trading range for today is between 1267.95 support and 1278.16 resistance.

Expected trend for today: Bullish
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