XAU / USD turns back down and targets $ 1,670 before NFP

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  • The XAU / USD consolidates the decline within a pennant on the 1 hour chart.
  • The RSI has turned down well below the midline.
  • The US NFP holds the key as gold struggles below $ 1,700.

After hitting nine-month lows at $ 1,687 during this Friday’s Asian session, gold bulls (XAU / USD) are struggling to extend the recovery above the $ 1,700 level.

Gold prices have entered a consolidation phase after failing to find acceptance above this region on a couple of occasions. Therefore, the XAU / USD is moving within a pennant pattern on the 1 hour chart.

A close below the uptrend line support at $ 1,691 could validate the breakout of the pennant, opening the doors for a test of the $ 1,674 / 72 region, which is the confluence of the pattern’s target and the June low. 2020.

The RSI has turned down while trending down within the bearish zone, suggesting that there is room for a further decline.

On the other hand, a sustained move above the $ 1,700 level, where the downward sloping 21-period moving average and pattern resistance converge, could reignite recovery momentum towards the $ 1,710 50-period SMA.

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