Gold prices might retrace upwards soon. The yellow metal has been struggling for the last two days to make a triumphant move above $1556.38. However, the overall technicals seem to please the bulls.
The global equities are slightly developing optimism, expecting growth post-US-Sino Phase 1 deal accomplishment. Despite the equity market growth, the demand for the safe-haven asset continues to remain stable.
USD Index in Action
The US Dollar Index appeared to nudge higher, confronting the overhead red Ichimoku Clouds. Also, the Index has managed to somehow break above a two-and-a-half-month-old counter trendline.
Anyhow, in order to make a confirmed bull run, the Greenback must cross above the aforementioned Kumo cloud barrier and touch 98 mark.
Though the week might end on a negative note, a strong positive outlook continues to stay intact for upcoming sessions. Last week, the gold prices had thrashed above $1557.21. And, this week, the prices assure to keep hold of the highest levels, without shedding many gains.
Gold prices trade well above both the base line and the conversion line, cheering the bulls. Kumo clouds remain as a concrete support region, preventing substantial declines.
Moreover, the MACD has displayed a bullish crossover with the MACD line crossing above the conversion line.
As I look into the daily timeframe chart, I can see a Bullish Flag trading pattern. Though the flag has not showcased a breakout yet, possibilities for an upside remain higher.
Also, the Stochastic Oscillator was indicating momentum ~60 levels, which must be sufficient for a kick start. However, the overall momentum has not changed much for the last couple of sessions.
Meantime, the lagging span of the Ichimoku Clouds remains positioned above the XAU/USD pair, suggesting uptrend as the primary trend. But, the conversion line that lies above the pair puts a question mark on the resilient bulls, resisting immediate upside moves.
On the 4H chart, the bulls have already started playing out well. The momentum remains near the overbought territory, acting as the powerhouse for the pair bulls. Any sudden movement to the upside would immediately trigger the resistances stalled near –
Meanwhile, the SMA confluence made up of 100-day, and 200-day SMA might act as a cushion for any unexpected downside moves. Though I can see no abrupt growth in the volumes, the pair has still managed to trade marginally with the 50-day SMA, aiming upside.