Simple Moving Average (SMA) 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Market and Price Action (patterns, candlesticks)
Short-Term to Medium Term
- In the 1H chart, we see gold sliding sharply from 1531 , and cracking a pivot just below 1520 . Now, a 50% retracement targets the 1500 level.
- The RSI is tagging 30 reflecting bearish momentum. In a pullback, the market should not push the RSI reading above 60, if it is to maintain the bearish momentum.
- The 4H chart shows the market turning after a slow crawl towards the 61.8% retracement level and a pivot at 1530 . The RSI shows that the market is bullish in the short-term, reflecting a medium term ranging mode.
- In the very short-term we are resolving overbought conditions seen in the 4H RSI. The 1500 pivot is indeed important. If the current decline is supported above 1500 , we can be developing a bullish attempt towards 1575 . A break below that extends the correction , and returns the bearish bias in the short-term.
- A break in the 4H RSI below 40 breaks the bullish momentum, and suggests this short-term bearish scenario, with 1470 as the first bearish target.
Is risk sentiment still in demand of gold? What are other factors affecting the precious metal? Subscribe and become a member to shareyour views and join live discussions as well as webinars about the markets.
Fan Yang CMT
Chief Technical Strategist