Gold has been on shaky footing recently, but can it find support soon?
Here are the levels I’m watching on the 4-hour time frame.
As you can see from the chart below, the precious metal has formed lower highs and slightly lower lows to consolidate inside a falling wedge pattern.
The commodity price is already retreating after testing the wedge resistance around $1,950 and might be setting its sights on the bottom around $1,880-$1,900.
Technical indicators are looking mixed for now. The moving averages are still oscillating to reflect rangebound action, but the 100 SMA appears to be making a bullish crossover from the 200 SMA.
At the same time, Stochastic looks ready to pull higher from the oversold area to signal a pickup in bullish momentum.
If that’s the case, XAU/USD might go for another test of the wedge resistance and even attempt to break higher.
I’m seeing a tiny head and shoulders pattern on the latest test of resistance, though, so a break below current levels might still bring enough downside momentum.
Besides, the upcoming U.S. CPI release might jumpstart volatility for this anti-dollar asset, so I’d keep an eye out for the actual results!