Gold Bulls Await A Fresh Impetus Above 1,740 To Resume Rally

Technical analysis of Forex market

Gold bounced off 1,699 to fight the tough wall around 1,740 on the four-hour chart, which has been a crucial obstacle to upside movements since the start of the month.

The sideways trajectory in the RSI and the MACD and the flattening Ichimoku lines are not in favor of any significant bullish action at the moment but are not taking the bears’ side either. Therefore, buyers will probably wait for a close above 1,740 before targeting the key 1,760 – 1,768 area, which also encapsulates the upper surface of the short-term bullish channel. Another step higher from here would shift the spotlight towards the 200-period simple moving average (SMA) at 1,777, though only a rally above 1,814 would violate the downward pattern in the bigger picture.

If selling pressure resurfaces, the 20-period SMA at 1,728 may prevent any decline towards the bottom of the channel and the 50-period SMA at 1,720. Should the sell-off extend below 1,700, the price could revisit the restrictive area around 1,680, where any break lower would open the way towards the bottom of the long-term bearish channel seen at 1,667.

Summing up, gold is currently holding a neutral-to-bullish short-term bias. A break above the 1,740 ceiling would make the rebound of 1,676 more credible, while a drop below 1,720 could raise negative risks in the market.