Gold Records 3-Week High, Ichimoku Suggests Further Gains

Technical analysis of Forex market

Gold prices edged sharply higher in the previous days, hitting a more than two-week high earlier today. Also, the metal is approaching the eight-month high of 1326 and a successful jump above this strong barrier would resume the bullish outlook.

The RSI indicator is holding around the overbought zone and the 70 level, while the MACD oscillator is strengthening its momentum above the trigger and zero lines in the 4-hour chart. Also, the price stands well above the Ichimoku cloud and the red Tenkan-sen line as well as above the simple moving averages, suggesting further gains.

In case of a pullback below the 1326 level, the yellow metal could create a consolidation area, within 1302.50 and 1326, while a jump above it would open the door for the next strong resistance of 1333, identified by the inside swing bottom of April 2018. Higher still, the price could meet the 1338 hurdle, registered on April 2018 as well.

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In the alternative scenario, the market could fall until the 1315.50 – 1318 support zone before slipping below the Ichimoku cloud. The next support level is coming from the 1302.50 support, taken from the latest lows.

To sum up, in the medium-term picture, gold is strongly bullish given the higher highs and higher lows registered in the past three months.

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