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.

Omkar Godbole FXStreet Contributor

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
PP 1515.15
1. S1 1502.65
2. S2 1491.7
3. S3 1479.2

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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