Commodities

Technical Analysis – Gold’s sideways picture remains skewed to the upside

Posted on June 22, 2020 at 7:33 am GMT

Anthony Charalambous, XM Investment Research Desk

Gold is currently pushing efforts to overrun the upper Bollinger band residing at the 1,754 resistance. The mid-Bollinger band and the 50-day simple moving average (SMA) have managed to maintain optimism in a sideways market that has taken over since the 91-month peak of 1,765.03.

The short-term oscillators reflect the latest boost in the price of the commodity. The MACD, in the positive region, has pushed above its red signal line, while the RSI, following a bounce at the 50 mark, is increasing in bullish territory. Looking at the stochastic lines, they too hold a positive charge heading to the 80 level. Additionally, a prevailing bullish bearing commands the SMAs, which support an improving picture.

To the upside, immediate resistance may arise from the 1,754 obstacle joined by the upper Bollinger band. In the event the nearby multi-year peak of 1,765.03 and the 1,775 barrier fail to halt a new found confidence in the commodity, the 1,796 and 1,803 peaks from October 2012 and November 2011 could come into play. Surpassing these, the 1,816 border achieved in September 2011 could then be challenged.

If sellers steer the price lower, initial support could develop at the mid-Bollinger band of 1,723 and the 50-day SMA at 1,716 beneath. Another dip down could pause at the lower Bollinger band residing at the 1,692 level, that being the 23.6% Fibonacci retracement of the up leg from 1,455.17 to 1,765.03. If selling interest persists, the critical region of troughs from 1,669 – 1,660, where the 100-day SMA also lies, could draw traders’ attention.

In brief, the short-term bias remains neutral-to-bullish above the 1,669 trough and a break above the 1,765.03 peak would revive the positive outlook in all timeframes.

gold

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