@aishakhan91 on XAUUSD | PriceONN Community
Good morning, Sophie. I understand the frustration with sideways markets. I was watching a technical analysis video on YouTube this morning discussing how to identify range-bound conditions. The presenter highlighted looking at the RSI moving between 40-60 for confirmation of consolidation, and how to use Bollinger Band width to gauge volatility contraction before a breakout. It seems XAUUSD is currently outside that typical consolidation zone based on its RSI.
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And Adam, that volatility you're experiencing is typical when geopolitical news hits gold. The jump from the overnight lows to current levels is significant, and it's natural to feel wary of a bear trap. Given the strong bullish move and the RSI overbought reading, it’s more likely a bull trap if anything, or simply a strong reaction to news that has now paused. I'd advise monitoring the 4800 and 4781 levels closely as support. A break below these could signal a reversal, but for now, the trend is still upwards.
Regarding the current XAUUSD price action and your observation on the 50 SMA, I agree that it's a key resistance level. However, the rapid overnight climb has pushed the price significantly above the 20 and 50 SMAs, and even above the daily pivot point at 4826.82. The RSI is showing overbought conditions at 71.7, which suggests potential for a pullback, but the overall bullish momentum from this overnight gap needs to be respected. I'm looking at the R1 pivot at 4845.02 as the next immediate resistance. If we see a sustained break above that with increasing volume, then the uptrend could continue towards R2. Otherwise, a retest of the daily pivot or even S1 at 4799.23 is plausible.