Commodities

Technical Analysis – Gold flirts with 23.6% Fibonacci; holds in bearish move

Posted on October 12, 2020 at 6:43 am GMT

Melina Deltas, XM Investment Research Desk

Gold has found immediate resistance at the 23.6% Fibonacci retracement level of the up leg from 1,454 to 2,074.89 at 1,927 and the 40-day simple moving average (SMA). The downside correction over the last two months is now being confirmed by the weak momentum in the MACD oscillator and the downward slope in the RSI.

However, if there is a significant step above the 23.6% Fibonacci, the door could open for the 1,972 barrier and the 2,015 hurdle. Moving higher, the all-time high of 2,074.89 could attract traders’ attention.

On the other side, a fall beneath the 20-day SMA could move the market towards the 1,849 support, which stands marginally above the 38.2% Fibonacci of 1,836 and the 1,818.52 level. Clearing these levels, the price could hit the 50.0% Fibonacci of 1,763 and the 200-day SMA currently at 1,748.

Summarizing, the precious metal has been in a downtrend after the bounce off the record high and only a decisive close above the aforementioned level could add optimism to bulls.

gold

Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. XM accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The research and analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it.

It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests and to disregard any conflicts of interest in providing our services.

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all of your invested capital, so please make sure that you fully understand the risks involved.