Gold (XAU/USD) Breaks down June’s Rising Trendline

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Gold (XAU/USD) Breaks down June's Rising Trendline

Trendline Breakdown: After failing to push above 1285 last week, gold fell to start this week, falling to about 1258 before finding support today. This is the strongest dip in June, and broke June’s rising trendline support.
gold 6/17 4h chart
(Gold XAU/USD 4H Chart, 6/17)

Not bearish yet: The 4H RSI fell from above 80 to almost 40, but stayed above this level. According to RSI Guru, Andrew Cardwell’s interpretation, the ability to hold above 40 after hitting 80 suggests the bullish momentum is maintained. From a price action perspective a hold above 1260 also respected the bottom put in at the end of May and beginning of June.

gold daily chart 6/17(Gold XAU/USD 4H Chart, 6/17)
The daily chart adds to the view that the market is bearish although June’s bullish momentum and price action has not been reversed yet. Note price trading under a the moving averages (200, 100, 50), and a falling trendline from April.

Conclusion: The bullish mode in June is still in play, but the prevailing downtrend in the previous month suggests our bullish outlook should be limited to 1290-1300 if not 1285. Although the bearish outlook is premature at the moment, xau/usd remains bearish under 1300, with the 1240-1245 lows in sight.

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.