After closing the week at precisely 1,900, gold is moving into a challenging week. Over the last four weeks, the precious metal consistently fought for recovery within the confines of an ascending parallel channel. The upside capped under 1,900 in October, while the channel’s support provides the much-needed anchorage.
Marginally above 1,900, gold’s price movement is limited by the 50-day Simple Moving Average in the 6-hour timeframe. The bearish outlook is emphasized by the 100 SMA slightly above the first moving average. Moreover, more resistance is anticipated at 1,910, 1,920 and the monthly hurdle at 1,940.
The Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) point towards consolidation taking over in the new week. If 1,900 fails to hold, the next target is 1,890. Simultaneously, the channel’s support may help absorb some of the selling pressure. Other key areas to keep in mind are 1,880 and 1,850.
It is worth mentioning that the bearish outlook may be invalidated if XAU/USD slices thought the 50 SMA and 100 SMA resistances. Price action beyond 1,910 may restart the rally to 1,940 by encouraging more buy orders.