Gold technical analysis: Under pressure after bearish outside day, eyes sub-$1,500 levels


  • Gold is flashing red after Friday's bearish outside day candle.
  • The 4-hour chart shows the rising channel breakdown and bearish indicator divergence.

Gold is currently trading at $1,508 per Oz, representing a 0.29% drop on the day.

The yellow metal created a bearish outside day candlestick pattern on Friday, which occurs when the trading range engulfs preceding trading day's high and low.

That candlestick pattern is considered an early sign of bullish-to-bearish trend change, especially if it appears following a notable rally, which is the case here.

Further, the 4-hour chart shows a bearish divergence of the relative strength index (RSI) and a rising channel breakdown.

Hence, a pullback to the Aug. 13 low of $1,480 looks likely. The bearish case would weaken if prices find acceptance above Friday's high of $1,528.

Daily chart

4-hour chart

Trend: Pullback likely

Pivot points

    1. R3 1549.55
    2. R2 1538.6
    3. R1 1526.1
  1. PP 1515.15
    1. S1 1502.65
    2. S2 1491.7
    3. S3 1479.2

 

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