Spot Gold (XAU/USD) at Higher Timeframe Resistance
Against the US dollar, the price of gold settled the week marginally lower (-0.1%), booking a third consecutive weekly loss for the precious metal. Any longs from $1,928-$1,960 on the weekly chart have likely been taken out, with breakout sellers perhaps showing more interest over the next few weeks. On top of the weekly chart displaying scope to press as far south as support at $1,807, the Relative Strength Index (RSI) is poised to explore under the 50.00 centreline (negative momentum).
What is interesting from the daily chart, aside from the series of lower lows and lower highs since the beginning of May: a downtrend, is where we ended the week: the underside of support-turned-potential resistance at $1,919. With weekly price retesting the underside of its support zone at $1,928-$1,960, forging resistance from $1,919 is possible this week. Unwinding from here, therefore, could have sellers occupy control and take aim at support from $1,866, which happens to share chart space closely with the 200-day simple moving average at $1,858.
Shorter term on the H1 timeframe, the yellow metal discovered support from $1,900 and formed a complex inverted head and shoulders pattern ($1,902, $1,893, $1,900) that completed on Friday (breached the neckline taken from the high of $1,913). While resistance is in play at $1,921, a break unearths the possibility of a run to the inverted head and shoulders pattern profit objective at $1,933.
Longer-term resistance from the weekly timeframe at $1,928-$1,960 and $1,919 on the daily timeframe informs traders/investors that any upside movement could be short-lived. While this does not mean that the H1 timeframe will not reach the inverted head and shoulders pattern profit objective this week at $1,933, it does mean that any longs taken based on this pattern, or any breakout longs above H1 resistance at $1,921, may lack energy and therefore strict trade management would be needed.
What is interesting from the daily chart, aside from the series of lower lows and lower highs since the beginning of May: a downtrend, is where we ended the week: the underside of support-turned-potential resistance at $1,919. With weekly price retesting the underside of its support zone at $1,928-$1,960, forging resistance from $1,919 is possible this week. Unwinding from here, therefore, could have sellers occupy control and take aim at support from $1,866, which happens to share chart space closely with the 200-day simple moving average at $1,858.
Shorter term on the H1 timeframe, the yellow metal discovered support from $1,900 and formed a complex inverted head and shoulders pattern ($1,902, $1,893, $1,900) that completed on Friday (breached the neckline taken from the high of $1,913). While resistance is in play at $1,921, a break unearths the possibility of a run to the inverted head and shoulders pattern profit objective at $1,933.
Longer-term resistance from the weekly timeframe at $1,928-$1,960 and $1,919 on the daily timeframe informs traders/investors that any upside movement could be short-lived. While this does not mean that the H1 timeframe will not reach the inverted head and shoulders pattern profit objective this week at $1,933, it does mean that any longs taken based on this pattern, or any breakout longs above H1 resistance at $1,921, may lack energy and therefore strict trade management would be needed.