Gold delivered additional decline, as expected

Gold's general commentary prior to last week: Gold eventually continued the uptrend throughout last week, giving a false breakout signal, as it did after breaking the Hourly 4 chart’s Resistance few sessions ago. Since the pattern remains an healthy Descending Channel, I believe there is some more downside to it, probably towards #1,900.80 psychological barrier which was representing former Resistance zone and now is acting as an Support. However, it may not be worth losing a potential new Selling leg for a few pips, so Buying now (especially for Medium-term) is Technically not advisable, even though Gold delivered almost #17 points decline throughout Asian session.


Technical analysis: I believe that Gold should lose more than #30 additional points within #3 sessions since all charts were critically Overbought, calling for Selling sequence. However, interesting variance on Daily chart’s RSI, which was Trading currently above the Resistance zone of #70.10. Last time Price-action got rejected on similar values (mid-January), Gold delivered the steeper fall of #4% in less than #8 sessions. New Higher Low’s Upper zone on the Hourly 4 chart is visible with the trend now even more Bearish. Throughout Thursday’s session, Price-action was pushed back to the Neutral Rectangle as Lower High’s extension Resistance hasn't yet been re-tested (Hourly 4 chart is dangerously approaching Technical Selling levels). Since it did so, then this was the first time that the Hourly 4 chart’s #1,931.80 was tested as a Support since late March. The #1,915.80 barrier is decent nearby Support so Sellers have a good breakout point. Gold hit the #1,938.80 benchmark and invalidated it on one try, not only due to #1,938.80 representing strong Support (see how it held strongly on April #10, April #11 and April #20) but also due Friday’s session parallel recovery on the Bond Yields (inverse correlation) and DX on Buying rally, arising Buyers on every local Low's. If #1,915.80 however gets tested and invalidated on one hit, Price-action may fill #1,900.80 (former multi-Month Resistance level) Intra-day.


Fundamental analysis: My #1,900.80 psychological barrier projection has almost been hit even earlier than I expected as today’s session Daily chart’s engulfing candle collapsed under the heavy Selling pressure from DX which found Support zone and attracted Buyers and Bond Yields on spiral downtrend. As I've mentioned multiple times on my remarks since April #14, Gold Traders should expect Selling sequence in extension. Gold was well Technically and Fundamentally equipped for a relief pullback towards Daily chart’s #MA50, which was much needed correction following the constant rise and soaring (check November #3 cycle). I am expecting Gold only to fall more under these conditions. As Daily chart is now marginally Trading below the Neutral Rectangle, current sentiment is turning into new Selling opportunity once again and even though I can expect mild correction towards #1,931.80 benchmark, Gold may decline as Low as #1,900.80 former Resistance turned to Support and #1,882.80 in extension (Higher Low’s trendline of the Descending Channel). There is strong possibility of another case of ceasefire negotiations which would make capital rush into the DX from safe-haven assets in demand such as Gold, I'd expect a test of the #1,882.80 Medium-term Support zone before any chances of recovery. Gold's main correlation is DX so look for pointers there.


My position: Gold delivered additional decline which I was talking about, but within Asian session borders. Personally, my formula points that Selling sequence is far from over and #1,915.80 Support break can extend the decline towards #1,900.80 barrier. This is signal I will use Intra-day, implementing strict Risk management since Price-action is Trading near local Low's.