Breakout failed
A failed bullish breakout could be tracked in the opposite direction. In other words, there are more opportunities for bearish reversals. Today's $2,917 low can lead to a drop below the bottom of the pennant, which can lead to a drop that could potentially fall below the bottom of the pattern. Support is important. As of today, the underline appears to be at the lowest of 2,892 on Tuesday. Therefore, it can be used as a proxy for the line.
The level of support is clearly visible
Nevertheless, if the line is broken, the pennant formation includes a provisional minor swing low at $2.878. A slightly lower swing is the lower swing, with the pennant bottom at $2,864. It should be noted that today, the 20-day MA (purple) rose to $2,862, roughly coinciding with the bottom of the pennant.
These two indicators are key to current progress. If either of them breaks down on the downside and gold stays there, the chances of deeper bearish retracements increase. The trend's rise angle has since changed, matching the MA for the most part for 50 days, and is now $2,743.
There may still be bullish possibilities
Despite the start of a pennant breakout, the critical advances above this week's $2,955 high will trigger a bullish continuation of trends in the weekly time frame. And it will get the money back on track to target higher price levels. The 300% extension shows potential targets at $2,982. More above is another extended price target of $3,012.
To see all of today's economic events, Economic calendar.
