Gold setting up to attack the $2,000 level
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Gold is currently trading around $1,990. The $2,000 level (red horizontal) is proving to be a significant psychological resistance level for XAUUSD. However, there are signs that the precious metal is preparing to break above this.
Firstly, underlying momentum is improving to the upside. The RSI has broken above its green trendline at 1. The indicator is now trading above the key 50 level, which indicates a bullish underlying momentum. The longer it maintains above 50, the more the underlying momentum will be price supportive.
In cooperation with the RSI breakout, the precious metal moved above its 30-week EMA and the EMA has turned up at 2. A moving average is a trend-following indicator, and the positive direction of the EMA bodes well for gold. This is supported by the DMI, where the green positive DI has crossed above the red negative DI at 3. Further divergence here will be positive.
The yellow metal has currently charted a higher trough (HT). If it can follow through with a higher peak (above black dashed horizontal), it will be above the $2,000 and will be in a defined uptrend, as per peak and trough analysis.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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