Gold Price Analysis: XAU/USD risks further falls amid a potential bear pennant

Gold saw a massive $45 drop on Friday, hit six-week lows.
The spot charted a potential bear pennant on hourly sticks
XAU/USD dropped below major hourly Simple Moving Averages (HMA).

Dhwani Mehta FXStreet

The massive $45 slump Gold prices (XAU/USD) on Friday created a bearish pennant formation on the hourly chart, indicating that the spot remains exposed to further downside risks in the near-term.

A decisive break below the rising trendline support around 1680 would validate the pattern, with a test of $1656 due on the cards. In absence of any healthy support levels keep the bears hopeful. Further, the prices have breached all the major HMAs on its south run, adding to the bearish bias.

The hourly Relative Strength Index (RSI) has bounced-off the oversold territory and therefore, a minor bounce cannot be ruled out the downside resumes.

Friday’s decline picked up pace after the 100-HMA pierced the critical 200-HMA from above.

Note that a bear pennant is usually a bearish continuation pattern.

Gold: Hourly chart

Gold: Additional levels

XAU/USD

Overview
Today last price	1685.13
Today Daily Change	0.00
Today Daily Change %	0.00
Today daily open	1685.13

Trends
Daily SMA20	1722.01
Daily SMA50	1697.49
Daily SMA100	1642.4
Daily SMA200	1569.59

Levels
Previous Daily High	1716.59
Previous Daily Low	1670.76
Previous Weekly High	1745.12
Previous Weekly Low	1670.76
Previous Monthly High	1765.38
Previous Monthly Low	1670.72
Daily Fibonacci 38.2%	1688.27
Daily Fibonacci 61.8%	1699.08
Daily Pivot Point S1	1665.06
Daily Pivot Point S2	1645
Daily Pivot Point S3	1619.23
Daily Pivot Point R1	1710.89
Daily Pivot Point R2	1736.66
Daily Pivot Point R3	1756.72

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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