XAUUSD Technical profit taking started.

Last week (April 15, see chart below), we discussed the 'necessity' of Gold (XAUUSD) for a medium-term technical pull-back based on its 5-year Cycles:


As you can see, we did get indeed the expected rejection at the top on Friday and this week we have started with almost a -5% already. The 1D RSI Double Topped on overbought territory and now is on a Lower Low. This RSI pattern since the October 06 2023 Low is very similar to the sequence that started on November 03 2022. As you can see on both occasions, Gold traded on Bullish Megaphones.

The 2022/23 Megaphone hit the 0.382 Fibonacci retracement level and the 1D MA100 (green trend-line) once its RSI started printing the correction sequence it has now. In fact the 1D MA100 provided the last bounce on both Megaphones (February 14 2024 and March 09 2023).

As a result, we remain bearish on Gold, targeting 2200 (0.382 Fib and potential contact with the 1D MA200) on the medium-term. Ideally, the best level to buy again for the long-term would be when the 1D RSI hits the oversold barrier (30.00) again, but until then we will follow up with many updates.


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