Commodities

Technical Analysis – Gold in a narrow trading range after Senate’s stimulus vote delay

Posted on December 30, 2020 at 10:39 am GMT

Christina Parthenidou, XM Investment Research Desk

Gold is in a tight range around the 1,880 level in the four-hour chart, stubbornly refusing to dip inside the Ichimoku cloud and below the tough ascending trendline, which has been strictly supporting the market since the end of November.

The odds for an exciting rebound are looking minimal as the RSI and the MACD continue to hold muted around their neutral levels, supporting the current sideways move in the price. The 61.8% Fibonacci of the 1,965 – 1,764 downfall at 1,888 could cancel any bullish attempt ahead of the resistance trendline slightly above it, safeguarding the neutral status in the market.

In the positive scenario, a close above the resistance trendline seen around 1,896 could set the stage for a sharper bullish parade towards the 1,915 – 1,930 restrictive region, which was last active during the June – October period.

Otherwise, should the bears claim the ascending trendline at 1,877, the precious metal could decelerate towards the 50% Fibonacci of 1,864 and the bottom of the cloud. The flattening 200-period simple moving average (SMA) at 1,852 will also be in the spotlight if sellers persist, preventing any move towards the 38.2% Fibonacci of 1,840.

Summarizing, gold could have an uneventful trading session in the short-term unless it breaks above 1,896 or below 1,877.

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