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  • The pullback might not be complete as there are some technical signs that there could be more bearishness to come.

  • XAU/USD has moved just over half a percent higher on Monday as the dollar index remains subdued.

Gold daily chart

On the daily chart, this move back up just looks like a retracement from the move lower last week. The 55 Exponential Moving Average has been providing some support in the session but until the black downward sloping trendline is broken the move lower looks set to continue. At the moment the wave pattern has presented us with a lower high lower low pattern and until that changes the chart still looks bearish.

The red support zone at USD 1674.50 seems to be a key level as a break below that zone could indicate the green horizontal line may be tested. Looking closer at the technical indicators, the Relative Strength Index is still positioned under the 50 area and there is still space for a move into oversold levels. The MACD is fully bearish with the histogram firmly red and the signal lines crossing over the mid-line at the moment. On the short timeframe (chart below) a break of the red trendline could indicate the continuation of the uptrend but that is the confirmation the bulls will need. 

Gold daily technical analysis

Gold 1-hour chart

On the hourly chart, the main feature is the aforementioned red diagonal trendline. If this level breaks it could indicate that there could be a pause in the new trend lower or even set the trend moving back up. Having said that there is lots of traffic in the way as both the 200 and 55 moving averages could act as resistance zones on this 1-hour timeframe. 

The MACD histogram has turned back up today but watch out for a move back lower in line with the underlying trend. This could be a good point for the bears to jump back in and USD 1670.76 per troy ounce is the support level to beat if the move lower is to be sustained. 

Gold hourly chart

Additional levels

 

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