- Gold could be about to move into a phase of distribution.
- The rally is decelerating on the lower timeframes.
As per last week's pre-open analysis, Gold, Chart of the Week: XAUUSD bulls pushing up against key resistances ahead of US CPI, where it was explained that there were prospects of a bull correction to fully test the bear's commitments with a focus on the US Consumer Price Index data for the forthcoming week, Gold indeed moved higher as the following will illustrate:
Prior analysis, Gold weekly charts
The price was accumulating at a prior structure in three weekly bottoms.
That W-formation looked menacing for the week ahead with prospects of a push into the trendline.
The Crab harmonic pattern on the daily chart was also a bullish feature:
The price had already slid out of a micro trendline and was accumulating on the backside which opened risks of a move higher.
Gold update, weekly chart
While it is still early days, this could be the makings of a prolonged bullish phase given that the price has broken the weekly trendline following a triple bottom and the impulse has closed firmly above the $1,730 structure.
The price action has left a W-formation as follows:
This is a reversion pattern that would be expected to see the price correct back toward the neckline in due course. Having said that, the price has formed a number of lower time frame structures along the way that could serve as support:
Gold H4 chart
The above chart illustrates the resistance area that the price has been heading towards coupled with the micro trendline that was broken on Friday as a sign of deceleration in the trend. We could expect to see a phase of distribution over the coming days. The hourly chart will be worth keeping an eye on in this regard:
US Dollar meets support
The DXY dropped below a key level of support on Friday, extending the downside below the trendline. However, it would appear that the bears are now meeting support at the lower quarter of the 106 area which could serve as a foundation for a significant correction. A break of 108.00 opens the risk of a prolonged reversion up the Fibonacci scale towards 109.50.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.