- XAU / USD is still on track to close the second day in a row in bearish numbers.
- Gold continues to trade below the critical 200-day SMA.
- The RSI indicator on the daily chart is declining towards 40.
The pair XAU / USD it came under heavy downward pressure in the second half of the day and fell to its lowest level in more than a week at $ 1,831. Although gold rebounded after that drop, it lost its momentum near $ 1,850 and was last seen shedding 0.32% on the day at $ 1,845.
Gold technical outlook
With Wednesday’s steep slide, XAU / USD is still on track to close below the critical 200-day SMA, which could discourage buyers from making big bets for now. Furthermore, the Relative Strength Index indicator on the daily chart continues to decline towards 40, suggesting that the recent recovery was a technical correction rather than a decisive change in direction.
On the downside, $ 1,830 (daily low) lines up as the first technical support before $ 1,817 (Jan 11 low). On the other hand, the 200-day SMA forms the first hurdle at $ 1,850, which is reinforced by the 61.8% Fibonacci retracement of the December rally, ahead of $ 1,857 (50-day SMA). Unless the pair achieves a convincing breakout above $ 1,850, sellers are likely to dominate the gold price action.
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