Gold on the four-hour chart has formed a bearish reversal pattern called head and shoulders. As price action depicts, the three-week uptrend has ended as buyers failed to recapture the market top at 1807.21. Moreover, weakening bullish bias resulted in the violation of the uptrend line, followed by a rebound. Afterwards, prevailing bearish momentum pushed the price back below the 50-EMA, hitting the 23.6% Fibonacci retracement of the prior uptrend, which lines up with 1777.75.
During Tuesday’s trading session, gold closed below this crucial level to trigger a bearish signal. More sellers are expected to take a clue and join the market, leading to further losses. The immediate support can come from the 1770 round level, which the market has reacted to it in the past. Should sellers pass this hurdle, the market bottom of August 5 at 1765.43 will go into the spotlight. Overcoming this barrier will send gold towards the 38.2% Fibonacci retracement level at 1759.18, which can lend plenty of support to the price.
On the upside, should buyers wake up, they will retest the 50-EMA around the previous level of interest at 1783.34. Overstepping this roadblock will pave the way toward the broken neckline. However, as long as the previous market top at 1801.62 keeps out of reach, the outlook is bearish.
Short-term momentum oscillators support the bearish outlook. RSI is pointing down in the selling region after posting a divergence. Momentum is moving below the 100-threshold, implying sellers are in charge. MACD has triggered a bearish signal with MACD bars crossing below zero. The signal line is also on the verge of crossing the baseline into a negative area.
The content of this material and/or any information provided should in no way be construed, expressly or by implication, directly or indirectly, as advice, recommendation, or suggestion of an investment strategy in relation to a financial instrument and is not intended to provide a sufficient basis for making investment decisions in any way. Any information, views or opinions presented in this material have been obtained or derived from sources believed to be reliable, but Errante makes no warranty as to their accuracy or completeness. Errante accepts no liability for losses arising from the use of this data and information. The data and information contained herein are for background purposes only and make no claim to be complete or comprehensive.
Recommended Content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.