- November 18, 2022
- Posted by: Tradingshot Articles
- Category: Commodities
Gold (XAUUSD) is approaching the most critical level of its long-term trend. That is the 1W MA100 (green trend-line), which is currently at 1802.69 and tends to be the deciding factor between Gold’s Bull and Bear Cycles.
This sample on the 1W time-frame starts from late 2009 and it shows that when Gold is in an uptrend and the 1W MA100 supports, the Bull Cycle remains. When it is broken decisively with successive candle closings below, the 1W MA100 from Support turns into the Resistance of the new Bear Cycle.
That last happened in mid June 2022. Based on both the 1W MACD and RSI, it would appear that the 2020 – 2022 price action follows the 2011 – 2013 sequence that initiated the Bear Cycle of the mid 2010s. As you see, the 1W MA100 didn’t break until February 2016, where a three year consolidation/ accumulatio phase started that gave way to the recent Bull Cycle.
As a result, we are on pivotal crossroads on Gold right now as it approaches yet again the 1W MA100 like in early August 2022 where it failed. Successive closings above it, would mean that the Bear Cycle is invalidated and at worst we enter a new accumulation period, waiting for the new Bull rally. Until that happens, expect the price to get rejected near or on the 1W MA100, which maintains the bearish long-term trend.
Which direction do you think Gold will break to?