Gold (XAU/USD) Awaits Breakout from a Week-long Range

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Gold (XAU/USD) Awaits Breakout from a Week-long Range

After a strong rally last week, Gold has been consolidating roughly between 1326 and 1306. We saw traders during the 6/26 session respect the support around 1306, bringing back June’s bullish trend in focus.
gold 6/26 4h chart
(gold 6/26, 4h chart)

The technical conditions in the 4H chart favor a bullish breakout. The moving averages in are in bullish alignment. The RSI has tagged 80 and held above 40, which reflects maintenance of bullish momentum according to the RSI guru Andrew Cardwell.
gold 6/26 weekly chart
(gold 6/26, weekly chart)

When looking at the weekly chart, you can see that gold is currently challenging a falling trendline from 2012 that held in March. Ability to break above the current consolidation in the 4H chart will open up the 1350 area, which is likely to be around a falling trendline from 2013. Also, this week’s range is 1326-1320=20, and a range breakout projects to 1326+20 = 1346.

A break below 1326 would also project towards 1300-1306. If it falls further, the 1285 level should provide support. Otherwise, if price breaks below 1280, traders will likely have shifted to the bearish mode.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.