Last week started with Gold prices digging into a big zone of resistance running from 1789-1797. And while that zone helped to hold the highs for much last week, this week started with a bang as Gold prices scaled-above this zone and ran right into the next spot of resistance, plotted from 1804-1808. This current resistance area was a batch of swing-lows from early-August trade that have now been repurposed as resistance.
Taking a step back for some perspective and trends remain rather opaque. While the recent jump in Gold prices makes for bullish potential with shorter-term outlooks, the longer-term backdrop here remains unconvincing. It does, however, put emphasis on the 1834 level, as this is a potential double top formation, and if that high gets taken out then the door opens for a run at the 1855 zone.
Given this week’s economic calendar with Jackson Hole on top of a slew of USD-related releases, and there could be considerable motive for Gold price action this week. While strength has been on full display, breakout potential remains at the current zone of resistance, spanning from the approximate 1804-1808, with another zone overhead from around 1824-1834. If bulls are able to take out that resistance, the next zone looming overhead runs from 1855-1860.
Underneath current price action there’s a support zone spanning from 1769-1775; this is the area that helped to hold last week’s lows. Below that is a secondary support zone running from 1755-1760, and below that is a third zone of interest from 1825-1834. The yearly low at 1680 continues to stick out, so if bears put in an outsized move, that 1680 level lurks below as a key marker sitting at the lows of Gold price action in 2021 trade.
— Written by James Stanley, Senior Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
This content was originally published here.
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