XAU/USD traded slightly higher yesterday and during the European morning today, after it hit support near the 1483 zone. Overall, the metal continues to trade below the downside resistance line drawn from the high of September 4th, but since October 11th, it’s been oscillating within a sideways range, between 1475 and 1497. Therefore, we will remain sidelined with regards to the short-term picture of this precious metal.
In order to start examining the downside again, we would like to see a decisive dip below the lower end of the aforementioned range, which is at 1475. Such a dip may initially pave the way towards the 1459 zone, which is marked as a support by the low of October 1st. If that level is not able to halt the slide this time around, its break may allow the bears to push towards our next possible support area, which is at around 1448.
Taking a look at our short-term oscillators, we see that the RSI lies above 50, pointing up, while the MACD stands fractionally above both its zero and trigger lines. Although both indicators suggest a somewhat positive momentum, the fact that the yellow metal is trading within a range, below a downside resistance line, does not allow us to place much emphasis on those studies. Even if the price trades somewhat higher, it may get stopped near the range’s upper bound or near the downside line.
We would start considering the bullish case only if we see a decisive break above 1503. Such a break may pave the way towards the 1517 zone, which stopped the buyers from drifting further north on October 3rd and 9th. Another break, above 1517, may extend the recovery towards the 1528 level, marked by an intraday swing low formed on September 25th.
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