Gold Price Analysis: Head-and-shoulders breakdown on 1H
- Gold's hourly chart shows a bearish reversal pattern.
- Daily chart candles and indicators suggest scope for a stronger pullback.
Gold is trading in a sideways manner around $1,708 per ounce at press time, having hit a session low of $1,705 a few minutes ago.
The hourly chart shows a head-and-shoulders breakdown. The bearish reversal pattern has created room for a sell-off to $1,694 (target as per the measured move method).
The daily chart, too, is reporting a bearish Doji reversal pattern – the yellow metal fell nearly 1% on Monday, validating or confirming the bull fatigue signaled by Friday's Doji candle.
The stochastic indicator has turned lower from the overbought territory, indicating scope for a notable pullback.
The metal could soon find acceptance under the former hurdle-turned-support of $1,703 (Mach 9 high) and extend losses toward $1,694. Alternatively, a strong move above $1,715 would invalidate the head-and-shoulders breakdown and open the doors for a re-test of the April 23 high of $1,739.
Hourly chart
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Trend: Bearish
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
