Despite positive U.S. data and pressure on the precious metal from the dollar, gold continues to attract buyers. From a technical perspective, however, Tuesday's failure near the round level of 3800 can be seen as the first sign of possible exhaustion of the bullish trend, given the persistent overbought condition of the daily RSI (Relative Strength Index). Still, last week's breakout above 3700 was viewed as a key trigger for the bulls, confirming the likelihood of buying on pullbacks near that level.
That said, a decisive break below 3700 would trigger technical selling, pushing the yellow metal toward intermediate support at 3645 on the way to the 3615–3600 level. On the other hand, momentum beyond the 3752 level — the high of the Asian session — will face resistance in the 3765–3770 level. A move above this resistance would pave the way for a retest of the historical high around 3790. Buying beyond that level, as well as above the round 3800 level, would create conditions for the continuation of the well-established uptrend observed over the past month.
The material has been provided by InstaForex Company - www.instaforex.com
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Despite positive U.S. data and pressure on the precious metal from the dollar, gold continues to attract buyers. From a technical perspective, however, Tuesday's failure near the round level of 3800 can be seen as the first sign of possible exhaustion of the bullish trend, given the persistent overbought condition of the daily RSI (Relative Strength Index). Still, last week's breakout above 3700 was viewed as a key trigger for the bulls, confirming the likelihood of buying on pullbacks near that level.
That said, a decisive break below 3700 would trigger technical selling, pushing the yellow metal toward intermediate support at 3645 on the way to the 3615–3600 level. On the other hand, momentum beyond the 3752 level — the high of the Asian session — will face resistance in the 3765–3770 level. A move above this resistance would pave the way for a retest of the historical high around 3790. Buying beyond that level, as well as above the round 3800 level, would create conditions for the continuation of the well-established uptrend observed over the past month.
The material has been provided by InstaForex Company - www.instaforex.com