XAUUSD WEEK 20-25 AUG TECHNICAL MIXED
It was a volatile week for broader equity markets as rising concerns regarding deteriorating economic conditions in Turkey and the ongoing US / China tariff skirmish weighed on investor sentiment. At the same time, underlying strength in the US Dollar (which has kept pressure on gold).
The sell-off will likely stall in the coming week courtesy of bearish exhaustion (Thursday's doji candle) and the oversold weekly RSI.
However, a stronger corrective rally will likely unfold only if the yellow metal defends and consolidates above $1,172 in the next week.
Further, it is worth noting that the upside will likely be capped around $1,210 in the near-term as long as the 5-week and 10-week moving averages (MAs) are trending south, indicating a bearish setup.
Bearish scenario: The metal could drop to $1,122 (December 2016 low) if prices consolidate in the next couple of weeks, allowing the weekly and the daily RSI to position in a more bear-friendly manner, before finding acceptance below $1,172. As seen in the above chart, the RSI is currently located at 24.00, the lowest level since July 2013.
In last week’s Gold forecast we noted that, “the immediate focus heading into next week is on the 1204 support pivot” with a break lower targeting, “subsequent objectives at the 50-line around ~1190s backed closely by a structural support confluence at 1174/78(area of interest for possible exhaustion / long-entries if reached).”
Overall short term consolidate(Long) but if can not break $1204-$1212 area it will go test for $1122.
The sell-off will likely stall in the coming week courtesy of bearish exhaustion (Thursday's doji candle) and the oversold weekly RSI.
However, a stronger corrective rally will likely unfold only if the yellow metal defends and consolidates above $1,172 in the next week.
Further, it is worth noting that the upside will likely be capped around $1,210 in the near-term as long as the 5-week and 10-week moving averages (MAs) are trending south, indicating a bearish setup.
Bearish scenario: The metal could drop to $1,122 (December 2016 low) if prices consolidate in the next couple of weeks, allowing the weekly and the daily RSI to position in a more bear-friendly manner, before finding acceptance below $1,172. As seen in the above chart, the RSI is currently located at 24.00, the lowest level since July 2013.
In last week’s Gold forecast we noted that, “the immediate focus heading into next week is on the 1204 support pivot” with a break lower targeting, “subsequent objectives at the 50-line around ~1190s backed closely by a structural support confluence at 1174/78(area of interest for possible exhaustion / long-entries if reached).”
Overall short term consolidate(Long) but if can not break $1204-$1212 area it will go test for $1122.
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