Since the March and 2014-high near 1388, Gold (XAU/USD) has fell to 1240.50 in May, but has found support there.
So far in June, price has respected this 1240.50 low. The 1H chart shows xau/usd consolidating above 1240 for a few sessions. Last week, after the ECB announced its stimulus plans, gold rallied from this consolidation.
We also saw price action test the price bottom, which traders treated as support. From purely price action perspective, gold looks like it is setting up for some short-term bullish attempt.
In the 1H chart, the momentum is turning as well. The 1H RSI has tagged 70, and is holding above 40. According to Andrew Cardwell, the RSI guru, this reflects a bullish momentum developing.
If price can push above last week’s high and 1260, the 1290-1300 will be the next key area to monitor for resistance. Note this is where the 200-day SMA resides, and was the central pivot area during April and May’s consolidation. A break above 1300 will be needed to revive any bullish outlook outside of the short-term for this week.
However failure to push above 1260, and a dip below 1246 should put pressure toward the 1240 handle. Below 1240, the 1217 support/resistance pivot area, the 1200 handle, down to the 1283 low on the year, could be in the scope of the a bearish continuation scenario.
To contact the reporter of this story, email Fan Yang at firstname.lastname@example.org
Previous: This Week in Forex 6/9 – 6/13: Spotlight on EUR/USD, GBP/USD, USD/JPY, NZD/USD