May 6, 2020, | AtoZ Markets - XAU is currently residing near $1700 area and consolidating. Moreover, the price residing inside the ranges of $1750 to $1650 from an extended period, and created a bullish pennant on the intraday chart. As per the current scenario, XAU may recover higher but need an impulsive breakout above the bullish pennant in the coming days.
The U.S. Federal Reserve said last night that the U.S. economy could start its salvation from the economic damages of the Coronavirus in the second half of 2020. But they also warned that the growth would be slow and uneven as the U.S. grapples with its worst depression in history. Moreover, even as some countries are eased their Coronavirus lockdowns at the starting of the week, the fear of a second wave of the pandemic bothered investors risk appetite. Besides, Oil was down, and stocks remain mixed as investors looking forward to Gold as a safe-haven market.
Gold Holding the Bullish Bias May Recover Higher in the Process
XAU is currently residing near $1700 area and quite corrective. Moreover, the price found support at the dynamic levels but still residing inside the Kumo cloud on the intraday chart.
Image: Gold 4 Hour Chart
According to the 4-hour chart, XAU is currently residing near $1700 area and trying to push higher. As per the current price action, if the price can break above the bullish pennant resistance line, the bulls may push the price higher towards $1750 in the days ahead. Alternatively, if the price breaks below the bullish pennant support, the bears may push the price down towards $1650 area.
Moreover, the dynamic level of 20 EMA is currently residing below the price, along with the Kijun line and Tenkan line. The dynamic levels may work as strong support to push the price higher. In contrast, if the price breaks below the dynamic levels, the bears may take over the market and decline. Besides, the MACD lines are residing near 0.00 level and gradually rising upwards, which indicates bulls are gaining momentum slowly.
Read More - Oil Facing Bearish Pressure Below $27.50 - Can WTI Reach $36?
Gold Bulls Are Still Optimistic
According to the Daily chart, Gold holding the bullish bias above $1700 area with a daily close. Moreover, the price found support at the dynamic level of 20 EMA, which is respected two times in the past. As per the current price action, if the price can have a daily bullish close above $1700 area, the bulls may push the price higher towards $1800. It should be noted; the bulls may face strong resistance at $1750 in the coming days.
Image: Gold Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing below the price, which may act as strong support to push the price higher. Besides, the MACD lines are residing above 0.00 level and holding the bullish momentum quite well.
To conclude, XAU has become quite volatile and corrective after it rejects $1750 area last month. But the bulls are still holding the momentum above $1700. We may see further corrections in the coming days until Gold breaks above $1750 area.