After a sharp rally last week, gold (xau/usd) has stalled this week, but still made a new high today near 1326. While the bullish trend in June remains intact, the rally is losing steam, and the 4H RSI is showing bearish divergence with price action. Also note that when compared with other 4H candles this week, the bullish candle to bring price to 1326 was strong. However, there was an equally strong bearish attempt after that, giving another reason the current rally has an imminent retracement ahead.
(gold, 4h chart, 6/25)
So far in the 6/25 session, the bullish trend is still intact, and price is trading within a new rising wedge, which is also a sign of a market looking for a top. (Elliott Wave practitioners might call it a diagonal triangle 5th wave, but let’s not get into too much of that right now). More important will be the resistance at 1330, seen in the daily chart.
(gold, daily chart, 6/25)
The daily chart also shows the RSI above 70, which reflects overbought conditions. This matters more in a sideways market for that time-frame. In this case, the daily chart indeed shows a sideways market with price action, and clustering of the moving averages. The clues are adding up for a pullback toward the 1300 handle.
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