Gold Potentially Looking for Higher Levels this Week? for OANDA:XAUUSD by Aaron-Hill

It was another positive week for the yellow metal, adding 0.3% and chalking up a fifth consecutive week in the green.

The key development on the weekly timeframe was the break and retest of resistance at $1,916 and reaching highs of $1,937, levels not seen since April 2022. Fashioning support from the aforementioned resistance places the technical spotlight on the double-top pattern’s peaks at around $2,070. However, it’s important to note that the Relative Strength Index ( RSI ) is at the doorstep of overbought territory, consequently further outperformance could be lethargic.

Elsewhere on the daily timeframe , the decision point at $1,867-1,886 was left unopposed last week. While still a valid area of technical interest, Quasimodo resistance is now on the radar at $1,966, accompanied by a 78.6% Fibonacci retracement at $1,973 (blue). Nevertheless, similar to the weekly chart, the daily timeframe’s RSI is registering overbought conditions, therefore the pace of buying might slow despite scope to approach resistance.

As a reminder of trend direction on the daily chart , here is where the research team stands at the moment (italics):

The trend is now technically higher. The reversal presented itself in early December last year following the break of the $1,786 previous high in November 2022. Since then, the precious metal also recently welcomed what is known as a Golden Cross, which is the 50-day simple moving average ($1,810) crossing above the 200-day simple moving average ($1,777). This is a pattern trend followers tend to watch and can signal the possibility of a long-term uptrend.

Friday’s technical briefing noted the following in terms of the H1 scale (italics):

Despite marginally violating trendline support on the H1 chart (green), drawn from the low $1,825, buyers found grip and reclaimed position north of the ascending line on Thursday. Another technical observation on the H1, which also bolsters a bullish case for the yellow metal, is that the first leg lower from $1,929 (16 January) bottomed at $1,896, while the second leg south from $1,925 (18 January) failed to form a lower low at $1,901. This informs market participants that buyers are gaining traction and a break above the local descending resistance (etched from $1,929) could be seen today.

As evident from the H1 chart, we have indeed seen the metal push higher, breaking the local descending resistance which welcomed a retest in the form of support on Friday. This—coupled with weekly price breaking/retesting breached resistance and scope to rally on both weekly and daily timeframes—bolsters the case for another leg higher and places H1 resistance on the radar at $1,939 this week.