(MENAFN- DailyFX)
Gold Technical Forecast: Bullish
- Gold prices set to aim higher in May after April ends three-month losing streak
- Channel resistance in focus if XAU breaks above 100-day Simple Moving Average
Gold is on track to break a 3-month losing streak as April comes to a close, with XAU/USD looking to set a monthly gain just shy of 4%. Despite the strong monthly performance, gold prices remain under February's opening price and the psychologically imposing 1800 level. A reversal from a Double Bottom pattern and break above trendline resistance helped propel strength in April. That said, gold prices may look to kick May off on a solid technical footing.
Prices are ranging between the 50-day (blue line) and 100-day (purple line) Simple Moving Averages (SMA) within a descending channel formed off the August swing high. With price above the channel's midpoint, gold's path of least resistance appears skewed to the upside. A break above the 100-day SMA would likely accelerate its upside trajectory.
The 23.6% Fibonacci retracement level from the March to April move is offering a level of support, which has helped underpin XAU since mid-April. Should that level fail to offer support, the 38.2% Fibonacci would shift into view, with the 50-day SMA close below. On the daily timeframe, the MACD oscillator appears to be losing momentum, a bearish sign, with the MACD line looking ready to breach below the signal line.
Gold Daily Chart
Chart created with TradingView
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--- Written by Thomas Westwater, Analyst for DailyFX.com
To contact Thomas, use the comments section below or @FxWestwater on Twitter
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