Gold managed to bounce back above the 1300 key-level on Tuesday, though, the market continues to lack direction in the four-hour chart according to momentum indicators; the RSI continues to trend around its neutral threshold of 50, while the MACD is moving below its red signal line but above zero.
In case the price corrects to the upside, resistance could run towards the upper bound of the Ichimoku cloud seen around 1303.83. Then a close above this level could drive the market up to the 10-day high of 1307.657 which if successfully broken could bring the upward trend off May’s low of 1281.97 back into play.
However, if the price declines, the 20-period simple moving average (SMA) currently at 1300.71 could provide nearby support ahead of the 38.2% Fibonacci of 1297.81 of the up-leg from 1281.97 to 1307.67. Even lower, the 50% Fibonacci of 1294.74, where the 50-period SMA is currently located, could be a stronger barrier to pierce since the area has been frequently approached as resistance over the past three weeks. A break, though, below the 61.8% Fibonacci of 1291.97, could increase the sell-off in the market even further.
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