On the daily chart below for XAUUSD, we can see that the bullish momentum has been waning trading into the major resistance at 2087 set in 2020. The price is now testing the red long period moving average which has been acting as support in the past few days.
We are likely to see more selling pressure if the price breaks below it. The buyers should be leaning on this level targeting another push to the upside. In case we get a deeper pullback, the blue trendline will be the target for the sellers. Looks like a lot will depend on the economic data in the next days beginning with the US Jobless Claims tomorrow and the US PMIs the day after.
XAUUSD technical analysis
On the 4 hour chart below, we can see that the price has been trading within a channel and it’s now testing the lower bound. The whole move within the channel has been diverging with the MACD which is generally a sign of a weakening momentum that is often followed by pullbacks or reversals. In this case, if the price breaks below the lower bound of the channel, we are likely to see a big selloff towards the support level at 1940.
On the 1 hour chart below, we can see the key level to watch now. The buyers are likely to pile in on this support zone at 1995 where we have the confluence of the previous swing low level, the lower bound of the channel and the daily red long period moving average. The sellers, on the other hand, will want the price to break below the level to jump onboard and extend the selloff to the 1940 level. If tomorrow’s data misses expectations, we should see a rally, while a beat should yield to the breakout.
