Gold (XAUUSD) Eyes Bullish Breakout Amid Consolidation and Short-Term Reversal

Market Analysis – May 29

Gold (XAUUSD) is poised for a bullish breakout amid ongoing consolidation and indications of a short-term reversal. From a technical perspective, the RSI (Relative Strength Index) is hovering close to the neutral 50 mark, specifically around 50.15, signaling a potential momentum shift. The RSI has consistently formed higher lows in recent sessions, pointing to underlying bullish divergence. This is further supported by the price’s recent rebound near the $3,200 support zone, where buying pressure re-emerged. Additionally, price action has responded well to the 14-day RSI trendline bounce, reinforcing the likelihood of a bullish move as sellers show signs of weakening around key demand zones.

Gold Key Levels

Resistance Levels: $3300, $3500, $3600
Support Levels: $3200, $3100, $2790

Gold Long-Term Trend: Bullish

Price action highlights a bullish setup developing within a descending triangle formation. Despite recent lower highs along the descending trendline, the $3,200 support—aligned with a known order block—has held strong, confirming demand strength in that area. A bullish hammer candlestick appeared following a dip into this zone, indicating robust buying interest. Moreover, liquidity above the $3,300 short-term resistance is now exposed, increasing the chance of a breakout as the market begins to establish higher lows. The bears’ failed attempt to breach the $3,200 level, followed by a sharp rejection, suggests potential bearish exhaustion.

The outlook for XAUUSD now leans strongly bullish, dependent on a breakout above the $3,300 trendline resistance. A successful move past this level would set sights on $3,500 as the next target, with potential to extend toward $3,600—coinciding with previous liquidity zones and historical resistance. From the current price range ($3,270–$3,300), the setup offers an attractive risk-to-reward profile for long entries, supported by bullish divergence and a strengthening market structure. A sustained close above $3,300 would invalidate the ongoing consolidation phase and likely prompt a measured move of approximately $300, in line with the range of the prior leg. This setup may be of particular interest to traders using forex signals for timely entries.

Gold Short-Term Trend: Bullish

Gold (XAUUSD) continues to exhibit bullish tendencies on the four-hour chart, with price action respecting the critical $3,200 support zone, which aligns closely with the 0.618 Fibonacci retracement level. The RSI currently reads 39.05, nearing oversold conditions, which could imply a forthcoming bullish momentum shift.

A potential reversal is expected from the $3,200 level, suggesting the formation of a higher low within the existing structure. If the price successfully reclaims the $3,300 level, it could pave the way for a move toward the $3,500 and $3,600 resistance levels.

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