- The XAU / USD confirms the breakout of the symmetrical triangle on the 4-hour chart.
- Acceptance above the 100-SMA is critical to triggering a further rally.
- The 200 SMA at $ 1,863 is the next upside target amid the bullish RSI.
Gold (XAU / USD) has captured new purchases early in the European session on Tuesday after a brief consolidation, as the bulls look to conquer the $ 1,850 region by extending the recovery from the two-month lows.
The general weakness of the US dollar, amid the revival of reflation trading due to the increased outlook for the $ 1.9 trillion stimulus package, continues to favor the XAU bulls. Gold is considered a hedge against inflation and currency degradation.
From a short-term technical perspective, the view for gold looks constructive after the breakout of a symmetrical triangle on the four-hour chart was confirmed.
Despite the breakout to the upside, gold bulls should find acceptance above the 100-period horizontal moving average at $ 1,843.
Gold prices are likely to see a sharp rise towards the 200 SMA at $ 1,863 following a sustained move above the powerful 100 SMA barrier.
The RSI is aiming higher above the 50 level, which suggests that the bullish bias remains intact.
On the other hand, a strong support near $ 1,835 could limit any pullback. That level is the confluence of the triangle’s resistance, now turned into support, and the 50-period SMA.
Lower down, sellers would then prepare for a drop towards $ 1,818, where the pattern’s support lies.
4 hour chart gold
Gold technical levels
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