The Chart of the Week: Gold under pressure below key counter trend-line

3XAU/USD has been correcting the monthly supply but given that the price hs still yet to complete a 38.2% Fibonacci retracement of the monthly rally, more downside can be expected in coming days/weeks. 

While fundamentally, gold is expected to be supported by an unwinding of the US dollar due to the prospect of global relation and large scale stimulus following the US election, the nearer term bearish technical outlook is compelling. 

It might be reasonable to expect some further downside ahead of the next bullish cycle as part of the longer-term bull trend. 

The following is a top-down analysis of the yellow metal, illustrating its technical bearish case according to market structure and the confluence of levels, Fibs and price action analysis. 

Monthly chart

Gold is in a phase of monthly distribution and is expected to continue to unwind to at least a 38.2% Fibonacci retracement.

Weekly chart

Related by strong structure, the price is on the verge of completing a 5-wave pattern. The 1,2 and 3-wave pattern has been highlighted to show the latest impulse and correction.

The third or fifth wave will have the monthly 38.2% Fibonacci retracement as the first target ahead of a 50% mean reversion and a confluence of prior resistance structure. 

Daily chart

The 21-day moving average is under pressure. A break of which would usually encourage further supply.

4-hour chart

As illustrated, the price is in the throws of a downside continuation in a bearish technical environment below the counter trendline resistance following a significant correction of the most recent bearish impulse.

Bears will likely face some support in the 1890 region prior to extending the bearish trend on the way towards the monthly/weekly target in the 1826/36 zone.