XAU/USD Cleared 656 Major Resistance

[topchess]

Hello,

Yesterday, XAU/USD cleared an important resistance at 656, which paves the way towards next major resistance on weekly charts at 676.

The initial move was started from 602 5 Jan Low. It looks like it hit a channel resistance at 661.20, however all indicators are bullish and point to more upside.

Any failure should be contained by 640.60 29 Jan and 30 Jan bottom, or around the 630 area to resume the broader uptrend.

Buy dips down to 640,630 for a move towards 676 Target.

Chart attached.

[topchess]

As expected channel resistance pushed Gold lower and it bounced sharply off its highs.

Gold is expected to face support near 640 area and 638, and 633.

While the broader trend is intact after a break of 656 major weekly resistance, a meaningful correction can't be ruled out.

Following is a Heikin Ashi chart which clearly showing a long legged doji that represents the sharp sell off from highs. It may also represent a near term reversal in the metal versus US Dollar with US dollar gaining strength across the board.

I am interested to see how Gold react to support area around 640. Stochastic has turned negative and RSI heading down from overbought. I wouldn't call that correction is over yet.

So it's interesting to see how things work next week.

A good near term target for bears would be 638 which contain the 38.2 Fibonacci retracement. But that needs a violation of bottom at 640.60

See chart.