Gold (XAU/USD) had a very strong week, which extended a bullish trend in June. On top of the trendline breakout last week, a simplified comparison of the choppy, consolidation-type price structure in April and May, to the sharp motive-type structure in June, suggests gold might be reviving a bullish trend that was started in early January this year. With that in mind, we should be looking for buyers on a dip this week.
(gold, xauusd, 6/22, 4H chart)
If we get a retracement, The 1290-1300 area should be monitored. It contains the 38.2% retracement level. Also, a bullish market would add confirmation if it can hold north of 1300, even if it briefly dips below it.
The 50% at 1281 to the 1285 resistance pivot, provides another band of possible support on a dip.
You should also monitor the 4H RSI. A bullish market should keep the RSI above 40, so if it drops to around 40 and levels off, a subsequent rise might reflect bullish continuation confirmation.
There are a couple of targets if the market confirms bullish continuation after a dip:
1) The 1331.16 April high is the first short-term target if price can show support after a pullback.
2) Above 1335, the 1387-88, 2014-high could be next. However, note a triangle resistance that could challenge the rally around 1350.
(gold, xauusd, 6/22, Daily chart)
Because the trend before 2014 has been bearish, at least in the daily chart, we should limit our bullish outlook to the triangle resistance for now.
In the daily chart, price has been oscillating around the 200-, 100-, 50-day moving averages which have been merging. Now if price can bounce off these moving averages which are around 1300 at the moment, traders should have more confidence to the bullish outlook with focus toward the high on the year, around 1387.
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