Gold has been catching the attention of the bulls recently, breaking out and closing above recent resistance points. I've noticed Gold has seen a touch of distributive selling at the intraday highs as the USD has firmed slightly from the recent sell-off.

What is interesting to note is the bearish divergence you can see in the XAU/AUD daily chart, which is one to watch going forward.

The trick with this signal is bearish divergence would be looking for a short side setup, but the recent short and medium-term trend is up. It is also clear to see the recent highs and lows are on the rise too.

The current juncture is interesting due to the US Dollar index pulling back below recent support.

The questions we need to be answered are: Will the ECB provide clarity on their stimulus plans tomorrow? Will the US dollar break back above support, causing Gold to weaken?

Will the Aussie dollar pull back from the recent gains, also noting the head and shoulders pattern on the AUD/USD pair. And what flow on effect will this have on XAU//AUD.

Plenty of reasons to keep a close eye on Gold, the AUD and the US dollar.

Gold Vs AUD showing Bearish divergence

Apr 21 2021

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