The price of gold (xau/usd) has been bearish in October after consolidating from July through September. The 4H daily chart shows the previous metal falling after breaking a descending triangle support. A rising trendline as well as the 200-, 100-, and 50-day simpel moving averages (SMAs) have been broken coming into this week.
gold daily chart 10/18
(click to enlarge)
Consolidation range and breakout targets:
- Gold is finding support at a previous support pivot around 1250, going back to June.
- We have a couple of "tails" that reached below 1250, but we can see that a consolidation range has formed just above 1250, with resistance around 1265.
- Price is now reaching towards the consolidation range resistance. I think a break above 1265.50 would first open up the 1277.25 pivot. But it does open up a rebound towards the 1300-1310.50 support/resistance pivot area.
- If however price holds under 1265 this week, we should see pressure continue on the 1240-1250 support area.
- The daily chart above shows that if price continues lower, the next target could be the key support/resistance pivot area 1190-1200.