Gold Weakens The Strong Upside Trend Below 1,900

Gold prices posted a couple of flat days within the 20- and 40-period simple moving averages (SMAs) in the 4-hour chart.


The neutral bias also supported by the RSI, which has been hovering near the 50-neutral level in the past few days and is failing to cross into positive territory. However, the stochastic is trying to pick up steam, creating a bullish crossover within the %K and %D lines.


Should the pair manage to strengthen its longer-term positive momentum, the next resistance could come around 1,903. A break above the aforementioned line would shift the bias to a more bullish one and open the way towards the five-month high of 1,916. Above this level, the next target could come at the 1,959 barriers, registered on January 6.


However, if prices are unable to move higher, the risk would shift to the downside, with the lower 20-period SMA at 1,886 once again coming into focus, as well as the uptrend line at 1,870. A penetration of this line would take the market until the 23.6% Fibonacci retracement level of the upward wave from 1,678 to 1,916 at 1,860 ahead of 1,855 and the 100-day SMA at 1,843.


In conclusion, the yellow metal has been in a positive tendency since March 31 that found strong support at 1,678.


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