Commodities

Technical Analysis – Gold maintains positive structure despite negative pressures

Posted on April 21, 2020 at 12:07 pm GMT

Anthony Charalambous, XM Investment Research Desk

Gold appears to be breaching the 1,678 level, that being the 23.6% Fibonacci retracement of the up leg from 1,455.17 to 1,746.95, and the 1,672 inside swing high, following a pullback off the 88-month peak of 1,746.95.

The short-term oscillators confirm the recent deterioration in the price. The MACD, deep in the positive region, has faded towards its red trigger line while the RSI, in the bullish zone, has dwindled nearing the neutral mark. Moreover, boosting further declines are the falling stochastic lines which have just entered the oversold zone. That said, continuing to aid the positive picture, are the upward sloping simple moving averages (SMAs).

If the retracement extends further under the 1,672 obstacle, the mid-Bollinger band at 1,654 could initially provide some friction before the support area from the 1,643 hurdle to the 38.2% Fibo of 1,635. Conquering this border, the commodity could encounter some pressure from the 50-day SMA ahead of the 50.0% Fibo of 1,601. With additional descents, the 100-day SMA at 1,574 and key trough of 1,566, which happens to be the 61.8% Fibo, could challenge the bears.

To retake the reins, buyers would need to immediately steer above the 1,672 level and nearby 23.6% Fibo of 1,678. Sustaining the drive up and overcoming the next resistance trench of 1,702 – 1,707 could accelerate the yellow metal towards the peak of 1,739 and the multi-year top of 1,746.95, which encompass the upper Bollinger band. A step above lies the 1,754 resistance, coming from back in November of 2012.

Overall, the short-term bias remains neutral-to-bullish above the 1,643 low, while in the medium-term neutral-to-bullish timeframe, only a shift below 1,446 would decisively shift the outlook to negative.

gold

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