Morning Market Update – XAU/USD

Gold looks to continue under red since yesterday after following some recovery rally rejection at 1296.32 levels and the repeated failure trend continues until now.

Mild recovery of US dollar put gold price under pressure with downside attempts being so far contained at 1282.98, but the risk of further easing exists as the levels of break 1282.98 are important for the next price action move.

Gold is showing little sign of ending the current bearish run that has started, with the pair hitting a series of bearish candles since yesterday and the rejection getting stronger now with the earlier candles today. We will wait for a break of 1282.98 just below the key resistance level for confirmation that the bears are in control.

Technical indicators remain in the bearish area with the 50EMA being tested yet again and have breached a couple of times but managed to stay above it. A break below the MA shall be the key for the next leg of the pair. However, the stochastic is in an oversold territory, suggesting a possible easing of the downside momentum.

Should we see an upside push, resistance will likely come from the 1290.33 level, The downtrend has been decisively broken and confirmed at 1290.33. We might have to view the price action at 1282.98, whilst momentum indicators are all now in solid recovery mode. The market has also decisively broken the initial support at 1290.33 which now means that a new trend is in formation.

The next test is at 1282.98. This is the old pivot level in place for much of the sessions which has seen a series of turning points and numerous consolidations. It would be a considerable scalp for the bulls to close consistently above 1282.98, which would subsequently open the next pivot around 1285. The four hourly chart shows strong near term momentum, a sequence of higher lows and the old 1282.98 resistance now becoming supportive.

Gold price shows some clear bearish bias by today’s opening on its way for new retest process to the previously breached resistance appears on the four-hour chart.

The expected trading range for today is between the 1277.12 support and the 1290.33 resistance.

Expected trend for today: Bearish
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