Gold Technical Analysis: Sidelined near $1,315 with bear flag on hourly, focus on today's close

Omkar Godbole FXStreet Contributor

Gold is currently trading largely unchanged on the day near $1,315, having created a bearish inside-day reversal candle yesterday.

That candle occurs when the price action falls within the high and low of the preceding day and is widely considered an early sign of bear reversal, if it appears after a notable rally, as is the case in gold.

That said, traders usually wait for confirmation in the form of strong bearish follow-through, preferably a break below the low of that candle. So, a close today below $1,312 could invite strong selling pressure and a drop to levels below $1,300 in the next few days.

The probability of gold closing below $1,312 would rise if the bear flag seen in the hourly chart is breached to the downside. That bearish continuation usually accelerates the preceding bearish move.

On the higher side, a break above $1,324 (Monday's high) is needed to revive the bullish view.

Daily chart

Hourly chart

Trend: Bearish

1. R3 1339.6
2. R2 1333.7
3. R1 1324.65
PP 1318.75
1. S1 1309.7
2. S2 1303.8
3. S3 1294.75

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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