The price of gold has been facing significant challenges in its road to recovery, with resistance at the $2,040 mark posing a major obstacle. This article explores the technical analysis of gold as well as the struggles faced by Bitcoin, providing insights into their future price movements.
Gold recently found support around the $2,000 zone against the US Dollar, sparking a recovery wave that breached the $2,020 mark. However, the price is now encountering multiple hurdles in its upward trajectory. The 4-hour chart of XAU/USD reveals that despite climbing above the 50% Fib retracement level from the $2,062 swing high to the $2,001 low, bears remain active near the $2,040 level. Moreover, gold is currently trading below the 100 Simple Moving Average (red, 4 hours) and the 200 Simple Moving Average (green, 4 hours).
A crucial bearish trend line is forming, presenting a major impediment to gold’s recovery. This trend line, situated near the $2,040 mark on the same chart, aligns with the 61.8% Fib retracement level from the downward move between the $2,062 swing high and the $2,001 low. If the price manages to break above this trend line and surpass the $2,040 level, it could experience a significant surge towards the $2,060 resistance. Subsequently, the next substantial resistance lies around the $2,080 mark, and a breakthrough there might lead to a test of $2,100.
While the recovery wave shows promise, gold still faces potential downside risks. Initial support is expected around the $2,015 level, followed by a major support zone at $2,000. Further losses could potentially drive the price towards the $1,975 mark in the coming days.
In addition to gold, Bitcoin has also encountered significant selling pressure, resulting in a decline below the critical $40,000 level. The exact reasons for this decline are multifaceted and beyond the scope of this technical analysis. However, the downward movement of Bitcoin intersects with the struggles faced by gold, indicating a broader trend in the market.
Both gold and Bitcoin have faced notable challenges in their recent price movements. Gold continues to grapple with resistance at the $2,040 mark and is trading below key moving averages. Meanwhile, Bitcoin experienced heavy selling pressure, leading to a drop below $40,000. Traders and investors should closely monitor these market dynamics and consider the technical analysis presented here to make informed decisions about these precious assets.
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