- Gold rose more than 1% on Friday.
- The XAU / USD broke above the 200-day Simple Moving Average (SMA) and is approaching resistance at $ 1,870.
- Key short-term support is around $ 1,850.
The pair XAU / USD It failed to capitalize on the widespread weakness of the USD on Thursday and wiped out a large chunk of its daily gains before closing at $ 1,842. On Friday, gold gained traction and extended its rally with a decisive break above the 200-day SMA, which currently sits around $ 1,850. At time of writing, the XAU / USD was up 1.15% on the day at $ 1,864.
Gold technical outlook
The short-term outlook appears to have turned bullish with Friday’s rally. The Relative Strength Index (RSI) indicator on the daily chart turned north and climbed above 50 for the first time in more than a week.
On the upside, initial resistance lines up at $ 1,870, where the 50% Fibonacci retracement of the December uptrend and the 20-day SMA coincide. Above that level, the 100-day SMA could be seen as the next target at $ 1,880 before $ 1,890 (Fibonacci retracement 38.2%).
Supports, on the other hand, are at $ 1,851 (200-day SMA), $ 1,845 (Fibonacci retracement 61.8%) before $ 1,831 (January 27 low).
Technical levels
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