The short term bias is bearish, but technical confirmation is needed
- After being capped by resistance near $ 1,835, gold has trended lower, falling below its 200-day mark. Easy midweek moving average.
- Thethe short-term bias is slightly negative, but see a sustained movement on the decline, XAU / USD should break through a key fibonacci support decisively
- This article describes the main technical levels to watch in gold this week. before
Most read: Gold prices were under pressure near 1800, with crude oil and copper capped at chart barriers
After briefly embedding below $ 1,700 in the first half of August, gold prices rose significantly until early September, but the buying momentum came to a screeching halt as the metal approached $ 1,835, an area where bulls had already met resistance to two previous times (see daily table below). From these levels, the XAU / USD quickly returned to the downside, falling under 200 days Easy midweek moving average, a bearish trend according to technical analysts.
At the end a pair of days, as volatility decreased, the price action became somewhat unstable and directionless, but the short-term bias remains slightly negative. However, for or to confirm and set in motion the next lower leg, we would need to see a decisive move below $ 1775, key support created by the 38.2% Fibonacci retracement of the August / September rise. If this floor is crossed in the next few days, bears could reignite selling pressure and triggering a retreat towards a confluence support in the 1755/1750 region.
While the previous case looks compelling, traders should also consider the alternative: a scenario that would invalidate the bearish narrative. That said, for bullish feeling to gain ground, gold would be have to exceed the 200-day SMA near $ 1,810. If the price breaks this barrier, the cap of $ 1,835 would become the immediate bullish target. Above $ 1,835, purchase interest could accelerate, but any reboundYesis likely to be contained by a downward trend line in the medium term, which now crosses the $ 18 mark55 Region.
In the coming week, the volatility of the precious metals market could increase with data on inflation and retail sales for August in the United States on the economy calendar. This suggests that gold could easily stage a big move and test key technical levels in the coming days. The price reaction around these levels could give traders important clues about XAU / USD short-term orientation.
TECHNICAL GOLD PRICE TABLE
EDUCATIONAL TOOLS FOR MERCHANTS
— Written by Diego Colman, DailyFX Market Strategist