Gold became very volatile $1700 level, despite the price had a bullish daily close above the $1695 support levels. Therefore, the volatility makes the current bullish structure questionable. Can bears take control of it? Let’s check the Gold’s Technical Analysis to find more levels and insights.
May 5, 2020, | AtoZ Markets – Gold is trading above the $1695 support level as bears failed to hold the price below it. Therefore, the price is very potential to continue higher with the target of $1750 level. However, the recent volatility in the price made the bullish structure questionable.
Gold moved higher as the US President Donal Trump threatened new tariffs against China. Overall, rising tensions between the U.S. and China, the effect of COVID-19 outbreak along with the stimulus programs are making the overall financial market volatile.
U.S. Secretary of State Mike Pompeo said that there was “a notable amount of evidence” that the coronavirus has emerged from a Chinese laboratory. Later on, the U.S. President Donald Trump’s remarks on Friday that tariffs on China were just “certainly an option” to retaliate for the outbreak. Moreover, the Trump administration is working out to find details of new tariffs; any findings would affect the metal market impulsively.
Gold is Volatile Above the $1695 Support Level
Gold bulls were very optimistic where stock markets, forex markets, and other equity markets were volatile due to the COVID-19 outbreak. However, the tariff of the U.S. over China may make the safe-haven nature of the gold questionable.
image: Gold H4 chart
According to the 4-hour chart, Gold had another bearish rejection from the $1695 level today on the four hourly charts. Therefore, the price started to stall between the range of $1700 to $1695 levels. So, any 4-hour candle close above the $1715 level would increase the upcoming bullish possibility in the price. However, the price has a rejection from the dynamic level of 20 EMA; therefore, a bullish rejection from the dynamic level may make the bullish structure questionable. In that case, if the price can have a four hourly close below the $1695 level after rejecting from the dynamic level, the bears may take control over time price.
Moreover, the MACD histogram is staying at the bullish zone but approaching the zero levels. As a result, if the MACD histogram moved to the negative zone, the bearish pressure may increase in the price.
Read More – Google Searches for Bitcoin Halving Have Surged
Gold May Move to the $1670 Level Again
Gold is very volatile above the $1695 level, and the bullish structure may weaken until the price breaks above the $1715 static resistance levels. However, the bullish price action is still on track until the price has a daily close below the $1695 support level.
image: Gold Daily Chart
According to the daily chart, Gold managed to have a daily close above the $1695 support and currently trading between the $1695 to $1700 zone. As long as the dynamic level of 20 EMA supports the price, it can continue high in the coming days with the target of $1650 level.
So, the main challenge for Gold bulls is to hold the price above the $1695 level. Otherwise, a strong bearish daily close below the $1695 support level may force the price to test the $1670 level again.
To Conclude, XAUUSD is still holding the price above the $1695 level. As a result, the price has a possibility of testing the $1750 where any intraday H4 candle close above the $1715 level would increase the bullish potential.