XAU/USD traded higher this week, after it hit support near the 1458 zone. However, the precious metal continues to trade within the downside channel that’s been in place since August 19th, and thus, any further recovery may stay limited, and the bears could take charge again soon.
If the metal continues to trade higher for a while more, it may once again meet strong resistance near the 1480 zone, or the upper end of the channel. The bears could reenter the action from near those zones and may decide to drive the battle lower for another test near 1458, or near 1445, a support marked by the low of November 12th. If they don’t stop there either, a break lower could carry larger bearish implications, perhaps paving the way towards the 1410 zone.
Looking at our daily oscillators, we see that the RSI, although below 50, turned up and now appears ready to move back above that equilibrium line. The MACD lies within its negative zone, but above its trigger line, heading towards zero. Both indicators support the case for some further recovery before, and if, the bears decide to take the reins again.
In order to start examining whether the bulls have gained the upper hand, we would like to see a clear move above the 1515 zone. That zone provided strong resistance between October 3rd and November 1st. Gold would already be above the upper bound of the downside channel and may travel towards the 1535 area, marked by the highs of September 24th and 25th. Another break, above 1535, may open the way towards the 1557 area, marked by the peak of September 4th.
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