XAU/USD outlook: Gold edges lower after hitting the descending trendline

The Moving Average Indicator shows negative signals.

• The momentum oscillators hold onto the neutral zone. Any downtick could drop the price.

• The descending trendline still prevents a change in the price attitude.

The precious metal erased all of yesterday's gains due to the slide following the challenge of the descending trendline. At 10:30 am GMT, the XAU/USD exchange rate was 1,759.80, representing a daily loss of -11.60, or 0.65%.

This analysis is based on a daily time frame.

The precious metal could not alter its negative temper. As soon as gold encountered its first challenge by touching the declining trendline. The rejection caused the yellow metal to lose almost all its yesterday's worth of gains. In addition, the Moving Average Indicator 100-MA crosses below the 200-MA and the 50-MA crosses below the 100-MA, sending a daily bearish signal. In contrast, the Relative Strength Index maintains its position in the natural zone with a decline in momentum, recording 44.20 on the value line. Any additional decline in momentum would weaken the yellow metal.

However, on the daily time frame, the XAU/USD encounters the first hurdle on the downside at 1748.39. If the price of gold falls below the aforementioned level, that would put the 1732.88 support level as the second barrier. Market participants may see the 1720.20 level as the next level down. followed by 1687.52.

Alternatively, if gold wishes to recover some of its weekly losses, it must maintain a price above $1,748.39. Therefore, this would encourage the XAU/USD to encounter the 1762.49 level of resistance. If the precious metal were to surpass the indicated level, it would pave the road to the 1774.04 resistance level. A successful breach would provide access to 1786.95. 1793.04 comes next.

Note: That when a resistance level is broken, it becomes a support level since the price will trade above it, and vice versa. Alternatively, the market may perform a false breakout or rebound after breaking support, or vice versa. Additionally, the market could bounce from any level of support or decline after breaking any level of resistance.