A decline below key levels is bearish
Last week's gains persisted, with gold prices reclaiming the uptrend line and two moving averages, but Monday's plunge to a five-day low and weak close negated any bullish signs that may have arisen. I did. For example, potential resistance on the way up will soon come as gold reclaims the ascending channel lines, the 50-day line (orange), currently at 2,666, and the 20-day moving average (purple), currently at 2,662. Overcame. some time.
These lines currently represent potential areas of resistance that are important as the correction is set for continued decline. In addition to the new daily close below the moving average and trend channel, note that the 20-day moving average is starting to move below the 50-day moving average.
Descending ABCD pattern points to 2,470
Since the downside high occurred on Monday, a descending ABCD pattern has been added to the chart in case the correction develops into a new downside low. Indeed, given yesterday's bearish close and today's still below the uptrend line, the rally could encounter resistance that could lead to price declines.
The first target of this pattern is 2,470 if the price changes between the two down swings of AB and CD are 100% symmetrical. This price level is a lower target as it coincides with both the 61.8% Fibonacci level at 2,473 and the previous support and resistance zones. Additionally, the uptrend line will also pass through that price range, so you should be on the lookout for signs of support if gold continues to fall.
Descending channel could fall below 2,537
A descending parallel trend channel appears on the chart by taking the upper trendline and creating a parallel level that touches the recent swing low of 2,537. We can provide you with a guide as you progress through the gold. For example, resistance may be expected at or below the upper channel line. Furthermore, if gold rises above that line and remains above it, demand is improving rather than decreasing. If gold breaks below the top of the downtrend line, the bearish case will hold.
