XAUUSD market technical outlook

Daily chart:

Gold rate declines at the opening of today’s session and so far this process doesn’t have any technical reasons - signals of bulls’ weakening were not formed at the tip of upswing and resistance at 1875.00 looks much weaker than the 1894.47-1898.73 zone, where probably buyers are headed (black arrow).

This zone is also of interest for sellers, who will have minimal risks here while going short amid extension of the mid-term downtrend.

However we won’t rule out a scenario of downward reversal from current levels as well since downward structure got sufficient upward correction.

Thus the key support zone now is 1850.27-1860.00.

Н1:

Local structure of gold got a break of the low at 1857.73-1859.92. Bulls managed to eliminate this problem quite quickly, but the fact remains - the market could lose upward dynamics. All this will create problems for growth at the resistance zone 1868.31-1871.46, where we would expect a new downward reversal.

Conclusions:

Main scenario: Growth to 1868.31-1871.46, then decline in direction 1857.73-1859.92.

Alternative scenario: Break of 1871.46 will drive the extension of growth in direction 1894.47-1898.73.

Trading recommendations:

1. Longs to 1868.31-1871.46 and probably to 1894.47-1898.73.

2. Shorts from 1898.31-1871.46 to 1857.73-1859.92.