Gold challenges crucial downward sloping trendline
2023.09.18 06:05
- Gold in a congested technical territory, capped by 50-day SMA
- A decisive close above the trendline could shift the short-term picture to bullish
- Momentum indicators endorse latest advance
Gold has been edging higher in the past few sessions, rebounding strongly from its drop below the 200-day simple moving average (SMA). Furthermore, the short-term oscillators suggest that bullish forces are strengthening as the price is testing the important trendline that connects its recent lower highs.
Should the buying interest persist, the bulls could attempt to conquer the May low of 1,932, which overlaps with the 50-day SMA. Surpassing that zone, the price may ascend towards the February peak of 1,959. Further advances could then cease at the July high of 1,987.
Alternatively, should bullion reverse back lower, the recent support of 1,901 could act as the first line of defense. A break beneath that zone might set the stage for the June low of 1,893. Even lower, the five-month bottom of 1,884 may provide downside protection.
In brief, gold marched towards the congested region that includes the descending trendline and its 50-day SMA. Looking forward, a clear jump above both obstacles is needed to turn the technical outlook back to bullish.
