Todays drop on Gold changes a lot
|Gold ended last week in the best way possible. The price on a weekly chart created a hammer candlestick indicating that the sell-off has terminated and now there is a time for the correction. Even the place of that hammer was not a coincidence as it happened on a yearly up trendline. Everything was ready for a correction but then...
New week came, with that - new hopes but at the beginning of the European session we witnessed a 17$ drop, which happened within minutes. Most agencies blamed for that a fat finger mistake but whatever the reason is, it still changes the situation a lot. From the mid-term positive sentiment we switched quickly to a negative one. Trend line is broken (pink) and the price is on a best way to hit the neck line (black) of a dangerous head and shoulders pattern. Breaking the black line can end the bullish hopes for weeks if not even months. As long as we stay above we are relatively safe but the situation today is way worse than it was on Friday.
We all know where the support is and what will happen when it will be broken. What about a possible comeback to the up trend? First sign that it may happen will be making new weekly highs and in the same time denying todays drop. Chances for that now are rather limited because we can see that the selling pressure is high and this sharp drop was not erased yet.
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