Can gold prices go any higher from here?
I’m seeing some signs of rally exhaustion on its 4-hour time frame and a potential reversal chart pattern, too!
Check out these inflection points to gauge if the trend is still likely to continue:
Gold (XAU/USD) 4-hour Chart by TradingView
It looks like gold traders are also feeling queasy while waiting for the U.S. election results!
The precious metal has been hovering above support around the $2,725 mark, which happens to be the neckline of what could be a head and shoulders reversal formation.
A break below the support zone could be followed by a reversal from the uptrend, possibly lasting by the same height as the chart formation. But can gold still bounce off these Fib levels?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on gold and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The potential head and shoulders neckline coincides, not just with the 38.2% retracement level, but also the 100 SMA dynamic inflection point. This faster-moving SMA is above the 200 SMA to hint that bullish vibes are present and could still lift XAU/USD back up to the swing high near R1 ($2,775) or higher.
A larger correction could still draw support from the 50% Fib near the $2,700 major psychological mark or the 61.8% level at $2,676.70, which lines up with the 200 SMA dynamic support and might be the line in the sand for a bullish pullback.
Just be sure to keep your eyes peeled for any reversal candlesticks at these levels to see if gold bugs aren’t letting up any time soon.
Also, stay on your toes for any headlines that could impact overall market sentiment, as well as other top-tier catalysts lined up for the week!
