- The precious mettle fails in continuing the upside trend after rejection on two consecutive occasions from a critical resistance.
- The Moving Average Indicator line of the 50-period crossed over below the 100-period, indicating more decline potential.
- XAU/USD clings close to the critical support level of 1824.37.
The yellow metal continued its decline today during the early European session. The XAU/USD dropped to approximately 244 pips after reaching its weekly high yesterday during the opening of the New York session. At the time of writing, gold was trading at 1,826.43, a daily increase of 3.80, or 0.21 percent.
However, XAU/USD trades close to the current week’s low. The gold price found a safe vicinity after hitting the weekly low of 1822.45, which held the yellow metal from more losses on Wednesday. Furthermore, the price couldn’t preserve the breach that occurred early today. As a result, the price clings to the support level of 1824.37.
The Moving Average of 50-periods crossed over below the 100-periods on the four-hour timeframe, which indicates more downside potential in the not-so-far future. On the other hand, the Relative Strength Index (RSI) holds in the natural zone, recording 46,784 on the value line, which does not support the trend idea. However, the candlestick pattern has constituted a double top pattern, which is known as a bearish pattern.
This analysis relies on the 4-hour time frame
On the four-hour chart, the first hurdle on the downside is the support level of 1824.37, followed by today’s low at 1821.39. Sellers would wait for the close of the four-hour candlestick below the aforementioned support level before placing their orders. If the price could breach the aforementioned level, the market participants’ eyes would be on the 1819.19 hurdle. A successful breakthrough of the level of 1819.19 would pave the way towards the 16th June low at 1815.32, followed by 1806.69, which was last seen on Wednesday, June 14.
Alternatively, if gold wants to gather gains, the support level of 1824.37 must hold the price from falling below. A confirmation would be when the price closes the candlestick of the 4-hour above the resistance level of 1830.58. This will push the price towards the 1836.41 level, followed by the level of 1840.58. If the price could decisively break the aforementioned level, that will encourage buyers to encounter the critical resistance of 1845.24.