XAU/USD traded higher on Wednesday, after rebounding on Tuesday. Overall, the precious metal is trading above the upside support line drawn from the low of August 9th, and thus, we would consider the near-term outlook to be positive.
That said, in order to get more confident on that front, we would like to see a clear break above the key resistance zone of 1834, which acted as a temporary ceiling for the price between July 15th and September 3rd. Such a break could initially pave the way towards the 1870 zone, which provided resistance between November 10th and 18th. Another break above that zone, could extend the advance towards the high of June 11th, at 1903, or the high of June 1st, at 1917.
Shifting attention to our short-term oscillators, we see that the RSI rebounded form near its 50 line, while the MACD lies slightly above both its zero and trigger lines. Both indicators detect upside speed and corroborate the case for further advances in this precious metal.
On the downside, we would like to see a dip, not only below the upside line, but also below the 1758 barrier, before start examining the bearish case. This would confirm a forthcoming lower low and may see scope for declines towards the low of September 29th, at 1721, the break of which could set the stage for extensions towards the low of August 9th.
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