The uptrend in the gold market changed to a downward trend against the US dollar.
Gold (XAUUSD) exited the growing channel and formed a descending channel. Recent price impulses have formed new lower Lows and lower Highs. However, the movement in the gold market has stopped for the last week. What’s next?
On the daily gold chart above, we see the last downward impulse ab that formed the last Low at 1459 (point b). Further, for more than two weeks, gold has been trading within this impulse in the range of 1535 – 1459.
This consolidation led to the formation technical triangle, and even two. One is long-term, you see it on the daily chart and it is highlighted in bright pink.
The second triangle formed at the base of the bearish daily bar. On the upper chart, this candlestick is indicated by a yellow arrow. This bar has formed short-term support and resistance for gold at 1473-1503. They are highlighted with short horizontal red and green lines.
After this candle, we see 6 inside bars… And a short-term technical triangle.
In the 4 hours chart above, the short-term triangle is highlighted in yellow.
Pay attention to the MACD indicator at 4 o’clock. The MACD line began to move horizontally at zero value. And the trend lines on the indicator also form a triangle.
Technical analysis of gold tells us about an extremely high degree of instrument consolidation XAUUSD. And from each consolidation, as a rule, there is a highly volatile exit, which provides good trading opportunities for traders.
We look forward to an increase in volatility in gold in the coming days. The stops have accumulated on both sides of the consolidation range at the values of 1473-1503. Buyers and sellers of the instrument will compete for them.
Additionally, let’s pay attention to the following factors. Currently, on Forex, we see the fall of the US dollar, but gold does not rise against this background. We also see a risk appetite in the market, including in connection with the hopes for a Brexit deal. But gold, as a safe asset, does not fall against this background.
This means that we need to more closely monitor technical factors, rather than fundamental ones. Who will be stronger – buyers or sellers of gold??? We will find out in the coming days.
And do not forget, the trend in gold has changed to a downtrend, so the more likely direction of gold movement is a decrease in its price.