XAU/USD Technical Analysis (1-Hour Chart): Battle Around $3,380 – Will the Uptrend Continue or Enter a Correction Phase?

Market Background and Current Price Movement

As of August 6, 2025, XAU/USD (Gold vs. US Dollar) is drawing attention on the 1-hour chart with price action hovering near the $3,380 level. After escaping a downtrend that lasted from late July, the market rebounded and turned upward in early August. It is now at a critical juncture: will the bullish momentum continue, or will a short-term correction emerge?

This analysis combines multiple elements from the perspective of technical analysis, including moving averages, MACD, ADX, trading volume, and price-based support/resistance levels, to help build actionable strategies going forward.

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Moving Averages: Suggesting Trend Continuation

On the chart, the price has moved above both the short-term moving average (20EMA, blue) and the long-term moving average (200SMA, red), forming a clear uptrend. Notably, the 20EMA crossed above the 200SMA around August 2, forming a near "golden cross," which was followed by a sharp rally, confirming the strength of the trend.

Currently, the price is moving above the 20EMA, which is acting as support. As long as this level holds, a continuation of the uptrend in the short term is expected. The upward slope of the moving averages also supports maintaining long positions.

MACD Trend: Slowing Momentum and Directional Assessment

According to the MACD (Moving Average Convergence Divergence), the MACD line previously surged well above the signal line during the rally, with a widening histogram. However, the histogram is now narrowing, and the MACD line has flattened and turned slightly downward.

This suggests the bullish momentum may be peaking, indicating a potential pause. However, since it hasn't significantly dropped below the zero line, a full trend reversal is unlikely—more likely a short-term correction. The MACD remains a key indicator for identifying trend shifts, so further crossovers should be closely monitored.

ADX Analysis: Quantifying Trend Strength

The ADX (Average Directional Index) is hovering around 50, indicating a very strong trend. This suggests the current rally is not a range-bound move but a well-supported trend. Additionally, +DI remains dominant over -DI, indicating continued bullish control.

This ADX level implies that trend-following strategies remain effective for bullish traders. For further reference, ADX is part of the momentum indicators category.

Volume and Price Relationship: A Reliable Uptrend?

During the upward movement from the $3,340 level, increased volume was observed, suggesting that buying interest is backed by real demand. Particularly, the spike in volume during the breakout above moving averages strengthens the validity of the trend.

However, volume has slightly declined recently, which may imply weakening buying pressure or some profit-taking. A resurgence in volume could pave the way for a breakout above $3,400.

Support and Resistance Levels

Strategy Outlook: Prepare for Diverging Scenarios

On the 1-hour chart of XAU/USD, although multiple technical indicators continue to show bullish signals, it’s important to consider the possibility of weakening momentum. In the bullish scenario, a clear break above $3,400 would bring $3,420 into focus as the next target, with a potential short-term surge to follow.

In the corrective scenario, a break below $3,360 may intensify selling pressure, possibly driving the price down to $3,320. Since this level aligns with medium-term support, it is also viewed as a key buying opportunity on pullbacks.

Conclusion: Adopt a Flexible Strategy Ahead of Potential Reversals

XAU/USD is currently in a strong trend but may be nearing a turning point in momentum. A comprehensive evaluation of technical indicators suggests that buying on dips or following breakouts at critical levels could be effective.

For short-term traders, focus should be on the $3,360 and $3,400 levels. Swing traders may consider $3,320, where the 200SMA resides, as a key entry point. Depending on future developments, increased volatility is possible, so risk management is essential when formulating strategies.

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Please conduct your own research and analysis before making any trading decisions.

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