FX.co ★ HiDe_N_SeEk | XAU/USD, GOLD

Gold On Wednesday, gold reversed course and surged to a seven-day high of $4,723, regaining the 10-day moving average. A solid closing in the higher third of the day's range will validate the strength of the one-day move, but resistance was observed close to the 20-day moving average. This might result in a continuation towards the next resistance zone, which is now between $4,774 and $4,790 and is located close to the 50-day and 100-day moving averages. The 10-day moving average serves as support for short-term gold, while the 20-day moving average serves as resistance. Signs of resistance are expected due to the long-term relevance of the combination of the two averages, indicating a similar resistance zone. Furthermore, the upper boundary line of a sizable rising trend channel indicates that they are near a resistance zone. Recently, gold broke free from a rising bearish wedge, finishing its first leg down at $4,501 on Monday. That created a higher swing low, but the wedge trigger indicates that a rally is under downward pressure. The bottom end of a zone is the 200-day moving average around $4,301, while more important lower objectives begin at about $4,402. After the wedge trigger, a counterrally would be typical and anticipated. It offers the opportunity to construct a lower swing high and another leg down toward lower targets. Until the 50-day moving average is recovered and the price stays above it, this bearish situation is still in effect. The 100-day average must have been recovered if the 50-day average was. The trend indication was confirmed since the 50-day average was hit as resistance during the lower swing high of $4,890 (top of wedge).

Gold On Thursday, gold kept rising and reversed the previous decline, hitting an 11-day high of $4,765 before sellers regained control. It was successful to test a resistance zone close to previous dynamic support from the 50-day and 100-day moving averages. For the first time since April 24, gold recovered its 20-day moving average as support, which was followed by a resurgence of strength. The technical significance of this zone as layered resistance is strengthened by the interesting observation that the 50-day and 100-day moving averages converged on the day that they were tested as resistance. This increases the likelihood of significant resistance in the vicinity of such averages. The price action on Thursday may build a lower swing high, but the prevailing pattern is still a declining structure. A decline below Thursday's higher daily low of $4,685, represented by an inverted hammer candlestick, will cause a breakback below the 20-day moving average, which is currently at $4,697. The 50-day average will shortly cross below the top resistance level, and the 100-day moving average, currently at $4,778, will soon overtake it. The recent alignment of that long-term dynamic trend signal close to the top of a rising trend channel increases its potential significance. Once more, two signs are pointing to a comparable price range. Additionally, the last rally successfully tested the 50-day moving average, which is currently at $4,781, as resistance, and the latest bounce could be the second confirmation of resistance in this area. Furthermore, the recapture of the 20-day moving average indicates that additional resistance testing may take place, keeping the short-term structure active inside a wider consolidation phase, despite the initial bearish reaction near the average.