Gold closed in the green for the first time in five days on Tuesday. As FXStreet’s Dhwani Mehta notes, XAU/USD is about to confirm a bull flag.
Favorable daily technical setup
“The wait for a bull flag confirmation almost seems over, as Gold price holds fort above the falling trendline resistance at $1,737. Daily closing above the latter is critical to validate the bullish continuation pattern and revive the uptrend toward the three-month highs of $1,787. Ahead of that, bulls will face immediate hurdles at the psychological $1,750 level and this week’s high near $1,770.”
“The 14-day Relative Strength Index (RSI) is holding firmer above the midline, endorsing the bullish potential. Adding credence to a likely upside, the upward-sloping 21-Daily Moving Average (DMA) is on the verge of cutting the mildly bearish 100DMA from below, portraying an impending bull cross.”
“On the flip side, a strong cushion is seen at Monday’s low of $1,733, below which the falling trendline support at $1,712 will be tested. At that level, the 100DMA creeps in. Further south, the bullish 21DMA at $1,708 will come into play, offering the last line of defense for the Gold price.”
See – Gold Price Forecast: XAU/USD to resume its downtrend and fall below $1,700 – ANZ
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