XAU/USD at a Critical Support Zone: Will It Hold or Break?XAU/USD Technical Analysis
The 1-hour chart of XAU/USD shows a recent downward movement, with significant bearish pressure following a prior uptrend. The key levels identified using the Woodie Pivot Points are crucial in understanding potential support and resistance zones.
Pivot Levels:
• Woodie Monthly R1 (2,838.26): This level serves as a major resistance, and any bullish move toward this level would need strong buying momentum to break above.
• Woodie Monthly Pivot (2,721.325): This level has acted as a critical turning point in the past, and a retest could potentially see a reversal or continuation depending on market sentiment.
• Woodie Monthly S1 (2,652.48): The price is currently hovering just above this key support zone. A break below could signal further downside momentum.
Price Action:
The chart indicates that XAU/USD has recently attempted to consolidate after a sharp decline but still struggles to maintain bullish traction. If the current support at 2,652.48 fails, the next downside target would be around the 2,630.732 mark.
Indicators Overview:
• The 1-Month Average True Range (ATR) is at 143.14, suggesting considerable volatility.
• Daily Potential High and Low levels indicate a trading range between 2,698.31 and 2,625.74.
• Daily True Range (DTR) percentages further highlight the current range-bound nature of the asset.
Outlook:
• Bullish Scenario: A recovery above the Woodie Monthly Pivot at 2,721.325 could attract more buyers, targeting the upper resistance at 2,838.26.
• Bearish Scenario: Sustained pressure below the current support could accelerate losses, targeting levels near 2,630.732 and beyond.
Traders should keep an eye on economic data releases and geopolitical events that may impact gold prices, as well as monitor volatility indicators to assess potential breakouts or breakdowns.