Gold Price Stalling at Wedge Resistance

FXTimes   |  September 19 2011 9:25 EDT

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Gold

The 4H gold chart shows the precious metal consolidating in what may be a wedge pattern. The market when seen in the perspective of the 4H chart is neutral because it is near the 200 simple moving average, and the RSI is near 50. The short-term bias however is bearish since the RSI did just kiss 30, and the market has been making lower highs and lower lows. IF the market is to regain bullish bias, it would need to break the current 18201825 resistance then above 1840.50-1840.60 area, thereby making the first higher high in September. Also, the RSI reading should break above 60, because in a bearish market the 60 level is resistance in the RSI. The 1800 psychological as well as actual support can help confirm the bullish case if it remains support. Then if the RSI pushes further above 70, price action is probably also pushing towards 1910-1920 highs. The bearish scenario should be considered if the 1800 support fails, and we see it become resistance. A push down towards 1750, 78.6% could be the target for the next downswing in the current wedge. Below 1749-1750, the 1702.50 low is in sight.
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Fan Yang CMT
Chief Technical Strategist
FXTimes

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