Gold has been struggling to find its direction lately, but it looks like a fresh trend is picking up for the precious metal.
Is it time to go with the flow?
Watch out for these retracements on the new gold channel forming!
Gold (XAU/USD): 4-hour
Gold (XAU/USD) 4-hour Chart Faster with TradingView
Gold appears to be acting more like a risk asset these days and losing its safe-haven appeal, as the precious metal has also given in to dollar domination.
With that, XAU/USD has formed lower highs and lower lows inside a descending trend channel that’s been holding since mid-April.
Are we seeing another correction right here?
Gold has bounced off the channel support near S1 ($4,443.22) and appears to be in the middle of a pullback to the 38.2% Fibonacci retracement level near the mid-channel area of interest.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on gold and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
A larger correction could reach the 50% Fib that lines up with the pivot point ($4,608.40) or the 61.8% level just slightly below the channel top.
Note that the 100 SMA recently crossed below the 200 SMA on this time frame to reinforce the bearish trend, so reversal candlesticks at any of the potential resistance zones could attract more sellers to join in.
If so, look out for a continuation of the selloff back to the swing low at S1 or to fresh downside targets near S2 ($4,345.81) and the channel bottom.
On the other hand, long green candlesticks closing above the channel top and R1 ($4,705.81) could suggest that a reversal from the downtrend is in the cards.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
Gold is pulling back inside a descending channel, and it can be hard to tell whether price is setting up for a continuation lower or a full trend reversal. Premium members can read our lesson:
📖 Trend Retracement or Reversal?
Reading this helps you understand how to distinguish a retracement from a reversal, what to watch for at key Fibonacci and resistance levels, and how to protect yourself when you can’t yet tell which one you’re in.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just what the chart is showing, but whether a pullback is a temporary pause in the trend or the start of something bigger.
