Gold technical analysis: Risks skewed to the downside after failed breakout

Gold's daily chart shows a failed falling channel breakout.
Monday's drop confirmed a bearish candlestick reversal pattern.
The yellow metal could drop to support at $1,481.

Omkar Godbole FXStreet Contributor

Gold is looking south, having witnessed a failed breakout in the previous two trading days.

The yellow metal closed at $1,504 on Friday, confirming an upside break of a falling channel, represented by Sept. 4 and Sept. 24 highs and Sept. 10 and Oct. 1 lows.

The breakout was confirmed with a Gravestone Doji and looked weak and was short-lived, as prices fell 0.80% on Monday.

Put simply, Monday's close at $1,490 activated twin bearish cues: a failed breakout and a Gravestone Doji reversal.

Gold, therefore, is likely to face selling pressure on Tuesday. The yellow metal is currently trading at $1,491 per Oz and could drop to support at $1,481 (Oct. 22 low).

The bearish case would be invalidated if prices rise above Monday's high of $1,508.

Daily chart

Trend: Bearish

Technical levels

XAU/USD

Overview
Today last price	1491.71
Today Daily Change	-0.79
Today Daily Change %	-0.05
Today daily open	1492.5

Trends
Daily SMA20	1494.39
Daily SMA50	1504.94
Daily SMA100	1464.43
Daily SMA200	1381.75

Levels
Previous Daily High	1508.23
Previous Daily Low	1490.1
Previous Weekly High	1517.92
Previous Weekly Low	1481.05
Previous Monthly High	1557.03
Previous Monthly Low	1464.61
Daily Fibonacci 38.2%	1497.03
Daily Fibonacci 61.8%	1501.3
Daily Pivot Point S1	1485.66
Daily Pivot Point S2	1478.81
Daily Pivot Point S3	1467.53
Daily Pivot Point R1	1503.79
Daily Pivot Point R2	1515.07
Daily Pivot Point R3	1521.92

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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