XAUUSD market technical outlook

A certain rubicon is reached. Corrective downswing is fully formed. On top of this gold is testing an important psychological support zone 1690.71-1702.58. This speaks for probable upward reversal (black arrow).

However we can’t ignore a tangible lower high as well as a break of 8-day EMA combined with the absence of any direct long setup at the tip of corrective movement. This keeps a high probability of decline extension in direction of the closest low (1659.45, red arrow).

Probably the closing price of today’s bar will clarify the situation.

H1-chart:

Local structure has quite a big trending amplitude that might aggravate further downward movement of bears. Market probably would need a correction to 1709.00-1710.00, from where we could again consider short trades.

Conclusions:

So, we expect a pullback to 1709.00-1710.00 and then continuation of pressure on the support level 1690.00.

Trading recommendations:

1. Longs to 1709.00-1710.00.

2. Shorts from 1709.00-1710.00 to 1690.00.