Gold is in an uptrend against the U.S. Dollar and trades at about $2,335 when writing. The XAU/USD chart below shows the price has dipped from $2,431, but the selling pressure eased at the 23.6% Fibonacci level, the $2,284 mark. Consequently, the bulls rallied the price to $2,377 by adding new bids to the market.
XAUUSD Technical Analysis – Bull Market Awaits
The yellow metal returned from $2,377 in today’s trading session and is testing the May 6 high, the $2,331 support. The technical indicators in the 4-hour chart are bearish, with the relative strength index flipping below the median line, hovering around 48. Concurrently, the awesome oscillator bars turned red, approaching the signal line from above.
A Closer Look at the 1-Hour Chart
Please note that the primary trend is bullish. Despite the technical indicators giving sell signals in the higher time frame, we cannot rely on them because the bullish bias is robust. That said, we advise following price action strategies and candlestick patterns in a lower time frame, such as 1-hour.
According to the primary trend, analysts at FxNews suggest waiting for opportunities to join the bull market. We have zoomed into the one-hour chart to examine the market closely and find key levels.
As shown in the 1-hour chart above, a hammer candlestick pattern is formed, clinging to the $2,331 support level, and the price is below EMA 50.
Gold, Hammer Patterns, and EMA 50
When a hammer candlestick pattern is found near a significant supply zone, it signals the trend might reverse from that mark. That said, from a technical perspective, the bullish trend resumes if the Gold price closes above EMA 50. If this scenario comes into play, the halt on the main trend will be lifted, and the XAU/USD price will likely target the $2,377 resistance.
XAUSD Bearish Scenario
The $2,331 mark supports the bullish scenario, which should be invalidated if the price dips below this level. In this case, the dip began at $2,377 and will likely expand to $2,300.
Gold Key Support and Resistance Levels
- Support: $2,331, $2,300
- Resistance: $2,353, $2,377
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
