Commodities

Technical Analysis – Gold edges lower after touching 1319 resistance level; holds in trading range in medium term

Posted on May 7, 2018 at 8:07 am GMT

Melina Deltas, XM Investment Research Desk

Gold has been edging sharply lower during today’s European session after the pullback on the 1319 resistance level. It is worth mentioning that the price has been developing within a trading range since January 2 with the 1365 resistance level being the upper boundary and the 1303 support level the lower boundary, while it lacks a clear trend.

Technically, in the 4-hour chart, the RSI indicator is sloping to the downside and is approaching the negative territory, while the stochastic oscillator posted a bearish cross within the %K line and the %D line, signaling further downside pressure in the positive area.

In the wake of negative pressures and a drop below the 20-simple moving average (SMA) in the near-term, the market could meet the 1303 strong support barrier. A successful close below this level could see a break of the consolidation zone and drive the precious metal lower towards 1289 taken from the high on December 2017.

However, if prices are able to break above the 20-SMA near 1313 in the next few sessions, the risk would shift to the upside, specifically towards the 1319 resistance level. A jump above this level could push the precious metal higher until the 1325.75 resistance barrier.

commodities gold

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