On Monday, the northern barrier is likewise reinforced by the 200-hour and the 23.60% Fibo. This factor is likely to either pressure the yellow metal lower or result in a minor period of consolidation today. In case the 55-hour and the monthly PP at 1,328.00 is breached, a possible fall is restricted solely by the 38.20% Fibo retracement line at 1,316.62.
The prevailing patterns suggest that the pair is likely to push lower in both short– and medium-term. The bottom boundary of a two-week channel is located at 1,310.00.
Gold demonstrated high fluctuation against the Greenback on Monday. The pair was moving along the lines of the 55– and 200-hour SMAs prior to breaching the latter to the upside.
As apparent on the chart, the rate’s movement has been bounded in two patterns, namely, a descending triangle and a short-term ascending wedge. The pair was testing the latter’s bottom boundary near 1,332.00, which also coincides with the 55-, 100– and 200-hour SMAs, early today. It is likely that this level holds strong and provides upward pressure for the pair.
The nearest resistance is set by the upper triangle line at 1,340.00. If taking into account the pair’s movement since late February, Gold should reverse from this level and initiate a new wave south down to the 1,322.11 mark later this week.
The yellow metal was guided by bulls on Wednesday who strengthened their positions during the second part of the session. As a result, the pair made a false breakout of the senior channel and surged up to the 2017/2018 high of 1,365.00.
This strong appreciation eased considerably during the Asian session, as Gold returned back in the senior pattern. This morning, it was set towards the 55-hour SMA and a short-term trend-line circa 1,344.00. The 100– and 200-hour SMAs and the 23.60% Fibo line are likewise located nearby.
In case this bearish sentiment continues to prevail, Gold should target 1,336.00 without surpassing it. In terms of upside potential, the pair is unlikely to move above the aforementioned high which coincides with the upper boundary of a six-week channel up.
Following a massive surge earlier this week, bears have maintained their dominance in the market since late Wednesday.
The yellow metal fell 1.41% against the Greenback during the previous session and breached the 55– and 100-hour SMAs. Its subsequent support level, set by the 23.60% Fibo retracement and the 200-hour SMA, was not surpassed, thus leaving the rate near the 1,340.00 mark this morning.
Technical indicators remain bullish, suggesting that this cluster could remain intact. In addition, the pair is likely to be hindered near the 55-hour SMA and, if surpassed, no additional resistance barriers until 1,362.00 are located in between.
By and large, this session might not introduce significant volatility in the market, as no fundamental data releases are scheduled.