Can gold prices rise from here?
I see some signs of bullish exhaustion on the 4-hour time frame and a possible reversal chart pattern as well!
Check these inflection points to gauge if the trend is still likely to continue:
Gold (XAU/USD) 4-Hour Frame Chart by TradingView
It seems that gold traders are also feeling anxious while waiting for the US election results!
The precious metal was hovering above the support level around the $2,725 level, which happens to be the neckline of what could be a head and shoulders reversal formation.
A break below the support area could be followed by a reversal from the uptrend, possibly continuing at the same height as the chart formation. But can gold bounce from these Fibonacci levels?
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your homework on gold and the US dollar yet, it’s time to check the economic calendar and stay up to date with daily fundamental news!
The potential head and shoulders neckline coincides not only with the 38.2% retracement level, but also with the dynamic inflection point of the 100 SMA. This fast-moving Simple Moving Average (SMA) is above the 200-day SMA to indicate a bullish sentiment and could still lift the XAU/USD pair back to the swing high near R1 ($2,775) or higher.
A larger correction could still attract support from the 50% Fib level near the key psychological mark at $2,700 or the 61.8% level at $2,676.70, which is in line with the dynamic support of the 200 SMA and may be the line in the sand for a bullish pullback.
Just be sure to keep an eye on any reversal candlesticks at these levels to see if gold bulls don’t stop anytime soon.
Also, stay on your toes for any headlines that could impact overall market sentiment, as well as others Line up this week’s top-tier catalysts!