- Gold bulls cheer a break above the $1900 mark.
- The technical setup remains in favor of bulls.
- $1919 is a tough nut to crack on the upside.
Gold (XAU/USD) has extended its break above the $1900 level after struggling below the latter for three straight sessions.
The underlying narrative for gold’s move higher is the unabated bearish bias seen in the US dollar versus its main competitors, courtesy of the US stimulus expectations-driven risk-on mood.
While looking at the technical chart, gold is on the verge of a breakout on the daily sticks, with the recent strength likely to extend on closing above $1909 level on Friday, as explained here.
In the meantime, the bright metal is seen confronting a critical horizontal (orange line) resistance at $1919 on the hourly chart, as it adds over 1% so far.
A break above that level is needed for a test of October 6 high at $1921. Buyers could then target the psychological $1950 level.
A brief pullback cannot be ruled out in the coming hours, as the hourly Relative Strength Index (RSI) has entered the overbought territory.
Therefore, any pullbacks are likely to be capped by immediate support seen at the bullish 21-Hourly Moving Average (HMA) at $1900.
The intersection of the 100 and 200-HMAs at $1897 could offer additional cushion before the bulls regain control.
XAU/USD: Hourly chart
XAU/USD: Additional levels
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