Sales pressure is growing
The next lower target is a $2,813 38.2% Fibonacci retracement, but the bear determinism will likely lead to lower-cost testing. The previous trend at $2,790 is an obvious target, but price levels can break if sales pressure is held. Low price levels are identified by at least two metrics as possible support zones.
The first is a 50-day MA, at $2,769, converging with a 50% retracement, at $2,769. The next low uptrend line is rising towards the 50% retracement zone, so trendlines must also be considered before gold approaches a potential support zone. This assumes that trendlines have no failure to maintain support.
Monthly Bearish Shooting Star in February
The long time frame pattern is a concern given that February is over today. Gold is set to complete the moon with a candlestick pattern of a potentially bearish shooting star. But it's not bearish until a breakdown occurs and you see the pattern. Nevertheless, it shows a month that ends in a relatively weak position compared to the monthly trading range.
The lowest for the month was $2,772, where the 50-day line is currently in its place. This leaves money in an unstable position where monthly failures can be triggered. Nevertheless, following through is important. If monthly bear fire begins, it will open up the possibility of a final test of pre-monthly resistance of $2,726 starting December when it is caused by a downside.
20-day MA shows major potential resistance
The interim rallies can monitor for signs of resistance that could develop into a bearish reversal pattern. The 20-day MA is the obvious line to be tested as resistance, currently at $2,896. The potential resistance zone can be paired with Tuesday's low of $2,888.
