XAUUSD market technical outlook

Yesterday’s trading session was closed by bullish pinbar from EMA8, which could be regarded a signal of gold market growth extension except for two things.

First one, upswing is fully completed and signal was received at its peak. It quite can be a false setup.

The second is that right now the price resides inside the strong reversal zone 1737.39-1746.27, which is very tough to overcome.

Thus despite some domination of bulls, scenario of correction appears more likely (blue arrow).

But of course we need to take into account a scenario with break of resistance 1746.27 that would definitely drive to upward movement to the area of recent high (1764.65, black arrow).

H1-chart:

Local structure has a reversal pattern “double high” that right now is leading to development of downswing. Potential of downward pullback is significant - up to the closest structure’s low (1726.62).

Well, let’s see how buyers will act after ending of this correction. We could say that mid-term uptrend is still valid in case of getting solid buy signals at this level.

Conclusions:

Decline in direction 1726.62 and then upward reversal.

Trading recommendations:

1. Shorts in direction 1726.62.

2. Seeking local buy signals at 1726.62.