Gold price gained bullish momentum this past week and traded above the $1,235 and $1,240 resistance levels against the US Dollar. The price even broke the $1,248 resistance and tested the $1,250 barrier.
Sellers appeared near the $1,250 level and protected further gains. A high was formed close to the $1,251 level and later the price started a downside move. The price declined below the $1,246 level and settled below the 50 hourly simple moving average.
A low was formed near $1,240 on FXOpen before the price started an upside correction. It moved above the 23.6% Fib retracement level of the last decline from the $1,246 low to $1,240 high.
However, the upside move was capped by the $1,244 level and the 50 SMA. Moreover, the 50% Fib retracement level of the last decline from the $1,246 low to $1,240 high also acted as a resistance.
More importantly, there is a major bearish trend line formed with resistance at $1,245 on the hourly chart of gold. Therefore, if the price corrects higher, it is likely to face a lot of sellers near the $1,244 and $1,245 resistance levels.
On the downside, the $1,240 level is an initial support, below which the price may perhaps test the $1,236 support area in the near term.
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