Morning outlook - XAU/USD falls below 1,340.60
- The way the exchange rate started new trading week confirmed that previously it was moving in a medium-term rising wedge.
- Generally, the pair is expected to gradually move to the bottom, trying to reach the lower trend-line of a senior ascending channel.
- However, in order to do that the rate will have to cross a combined support level formed by the updated weekly S1 at 1,329.68 and the 200-hour SMA.
- Even though it sounds like a too strong barrier, the path to the north is also well secured.
- Namely, it consists of the 55- and 100-hour SMAs as well as the weekly PP at 1,343.70.
- By the way, the bearish scenario is also confirmed on a daily scale, as last Friday the gold made a rebound from an upper trend-line of a long-term ascending channel.
Trade active:
The bearish scenario came true on Monday for the yellow metal. The bullion's price fell below the 1,330 mark in the second half of the day’s trading session.
If one looks at the hourly chart, a marvelous sight appears, as the metal faces no
support as low as the 1,312.43 level on Tuesday morning. However, that is not likely going to be the support, which stops the decline of the commodity price.
It is more likely that the bullion will continue in the angle, in which it has been
declining for the past few trading sessions, until it reaches the support of the
dominant channel up pattern somewhere between 1,315 and 1,320.
If one looks at the hourly chart, a marvelous sight appears, as the metal faces no
support as low as the 1,312.43 level on Tuesday morning. However, that is not likely going to be the support, which stops the decline of the commodity price.
It is more likely that the bullion will continue in the angle, in which it has been
declining for the past few trading sessions, until it reaches the support of the
dominant channel up pattern somewhere between 1,315 and 1,320.
