Gold Weekly Technical Forecast: Bullish Above $1,840.
- Gold prices head toward the 50-day MA (moving average) after rebounding off technical support.
- Strong recovery results in the formation of a hammer candle. Is a bullish reversal in play?
- XAU/USD aims for $1,880 but bullish momentum fades after a brief retest of $1,871.9.
Recommended by Tammy Da Costa
How to Trade Gold
Gold Prices Climb Higher After Rebounding Off Technical Support
Gold prices experienced their second consecutive week of gains, driving futures toward $1,880.
After a brief retest of the 100-week MA (moving average) around $1,1813, a swift retaliation from bulls drove prices beyond $1,840. With XAU/USD gaining traction, the prior resistance level now holds as support for the short-term move.
On the weekly chart below, the strong rebound resulted in the formation of a hammer candle, suggestive of a potential reversal. While buyers continue to push higher, both psychological and technical levels could provide some big hurdles for bulls.
Introduction to Technical Analysis
Learn Technical Analysis
Recommended by Tammy Da Costa
Gold Price (XAU/USD) Weekly Chart
Chart prepared by Tammy Da Costa using TradingView
As the release of Friday’s NFP (non-farm payrolls) report pushed prices higher, gold continued to rise before peaking at $1,871.9.
DailyFX Economic Calendar
For the upside to persist, prices would need to break the 50-day MA before attempting to reach $1,880.
Recommended by Tammy Da Costa
The Fundamentals of Breakout Trading
Gold (XAU/USD) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
However, if prices fall below the 100-week MA, a rise in bearish momentum could pave the way for a move toward the next big psychological level of $1,800.
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707