Gold Price Analysis: XAU/USD remains confined in a range, bearish bias persists
- Gold lacked any firm directional bias and was seen oscillating in a range around $1865 region.
- This week’s sustained breakthrough an upward sloping trend-channel favours bearish traders.
- Attempted recovery might be seen as a selling opportunity and remain capped near $1900 mark.
Gold extended its sideways consolidative price action through the mid-European session and remained confined in a narrow trading band, around the $1865 region.
The precious metal's inability to gain any meaningful traction comes on the back of this week's break below a short-term ascending trend-channel, which constituted the formation of a bearish flag pattern. Meanwhile, technical indicators on the daily chart maintained their bearish bias and are still far from being in the oversold territory, adding credence to the negative set-up.
That said, bearish traders might still wait for some follow-through selling below the $1850-48 strong horizontal support before positioning for any further depreciating move. The XAU/USD might then accelerate the slide towards testing the $1820-15 congestion zone before eventually dropping to test the very important 200-day SMA support – levels just below the $1800 round-figure.
On the flip side, the mentioned trend-channel support breakpoint, around the $1877-78 region, which now coincides with 200-hour SMA, should now act as a stiff resistance. Any subsequent move up might be seen as an opportunity to initiate fresh bearish positions and runs the risk of fizzling out rather quickly. This, in turn, should cap the upside for the XAU/USD near the $1900 mark.
XAU/USD 1-hourly chart
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Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
