June 23, 2021, | AtoZ Markets - Gold price rose today morning during the Asian session against the U.S. Dollar. After breaking below $1,870 to $1,850 price area, the bears pushed the price downside quite impulsively, and hit April 2021's lowest level. However, the price failed to break below $1,760 to $1,750 support area and bounced higher. Gold is currently trading around $1,782 price area and trying to recover upside. As per the current price action context, the price may face strong resistance at the dynamic level of 20 EMA on the intraday chart in the coming days.
Gold Nose Dive as the U.S Dollar Index Climbed
XAU/USD is currently residing near $1,782 price area and trying to push higher. However, the price is still residing below the dynamic level on the intraday chart.
Image: Gold 4 Hour Chart
According to the 4-hour chart, Gold nose dive and currently trading around $1,782 price area. As per the current scenario, if the price can break above the dynamic level with an impulsive bullish candle close, the bulls may regain momentum and push the price higher towards $1,800 to $1,810 price area as a first target. The second target will be $1,850 to $1,870 price area if the price can break above $1,800 to $1,810 resistance level in the coming days. On the contrary, if the price rejects the dynamic level with a bearish candle, the bears may push the price down towards $1,760 to $1,750 area again in the process.
In addition, the dynamic level of 20 EMA is currently residing over the price, which may work as strong resistance in the days ahead. Moreover, the Stochastic Oscillator lines are currently residing above the oversold level 20 and gradually rising upward after a bullish crossover. It indicates that the price may recover further higher in the process.
XAU May Revert Back to the Mean
According to the daily chart, Gold nose dive as the bears are optimistic. As per the current price action, the price may recover higher towards $1,810 to $1,820 price area in the coming days. So, if the price recovers higher towards $1,810 to $1,820 resistance area and rejects with an impulsive bearish candle, the bears may regain momentum and push the price down towards $1,760 to $1,750 price area again in the days ahead.
Image: Gold Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing above the price. Along with the Kijun line and the Tenkan line. So, the dynamic level may work as strong resistance to push the price downside. Besides, the Kijun line and the Tenkan line may work as a confluence of the dynamic level in the process.
To conclude, after an impulsive bearish momentum, the price requires an upside retracement at least towards the dynamic level on the daily chart. As the overall momentum is still bearish, there is a high chance that the price may decline further lower after an upward retracement in the coming days.