Gold has shown a double top pattern on the daily, and has been correcting since. In this analysis, we look at the significant resistance zones for Gold, and its bearish case.
Analysis
- The first thing to note is the descending megaphone pattern for gold on the hourly - We are creating lower lows and lower highs, with Elliott Triangle Wave Counts (ABCDE) leading to a potential drop - Within the pattern, we have seen another small bearish megaphone pattern play out - There is a bearish divergence on the hourly, with lower highs on the price, and higher highs on the Relative Strength Index (RSI) - We have FIbonacci resistance above the current price level, as well as the trend line resistance - The Moving Average Convergence Divergence (MACD) is creating lower highs and lower lows, as a sign of weakened momentum
What We Believe
We believe that a further downside is a probable case for Gold, while we may see some pullbacks on the way down. A rejection around the trend line resistance is highly probable.