- Gold continued to gain ground for a third straight session on Tuesday.
- The setup favors bullish traders and supports the prospects for additional earnings.
- Sustained advancement of an ascending trend line will negate the bullish bias.
The oro It rose for the third straight session on Tuesday and built on its recent bounce from the month-long lows, around the $ 1,860 region touched last week.
Since the recovery has taken place along a multi-day rising trend line support, a move back above $ 1,900 could have turned the short-term bias in favor of bullish traders. Acceptance above the 200 hourly SMA adds credibility to the constructive setup and supports the prospects for additional earnings.
The positive outlook is reinforced by the fact that the technical indicators on the hourly / daily charts have only just started to move into bullish territory. So some tracking force to test the next big hurdle, around the $ 1,910-12 region, seems like a clear possibility amid widespread USD weakness.
Some subsequent purchases should pave the way for an extension of momentum and trigger some technical buying. This, in turn, should help the bulls point back to challenge the $ 1,932-33 bid zone.
On the other hand, any significant pullback could continue to attract some dip buying near the aforementioned trend line support, currently around the $ 1890 region. Failure to defend the aforementioned support will negate the bullish bias and make the XAU / USD vulnerable to fall further towards the test of the horizontal support at $ 1,868-67.
1 hour chart
Credits: Forex Street
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