XAU/USD has moved this week in line with its short-term uptrend and the overall long-term uptrend reaching $1 865.
GOLD: correction time
The advance of gold (XAU/USD) this week has been too rapid. The precious metal got overbought. Both on the W1 and H4, the price highs weren’t confirmed by the highs of the Awesome Oscillator. In other words, there was bearish divergence. On the D1, a spike was formed and XAU/USD turned around to the downside and closed at the previous day low thus engulfing Tuesday’s and Monday’s candlesticks. It seems that there’s an interim top and that the correction might take the price further down.
A decline below 1,540 (50-period MA on H4) will open the way down to 1,528 (50% Fibonacci of the November-January advance). The next support will be at 1,509. The major resistance is located at 1,557. The return to this area may once again attract sellers. Only the advance above this point will let the price rise back to 1,577.
SELL 1,538; TP1 1,528; TP2 1,510; SL 1,543
The pair was falling down amid the waning US dollar. However, the situation changed this month.
Dollar continues to keep firmer on the day, all eyes on the US jobs report later.
Asian equity markets failed to sustain the positive tone from Wall Street where all major indices notched gains as technology sector outperformed for another day.