Gold: Explanation of the Bearish Channel with a Target of 1981!
Gold faced bearish pressures and reversed its trend during Wednesday's American session, dropping below $2,020. Positive PMI data from the United States contributed to the rebound in the yield of the 10-year US Treasury bond, negatively impacting XAU/USD. The latter could, therefore, become vulnerable to an acceleration of the decline towards the intermediate support of $1,988 before potentially descending to the 100-day Simple Moving Average (SMA), currently around the $1,972 zone. The next target would be the 200-day SMA, near the region of $1,964-$1,963. However, a possible continuation of buying could neutralize the short-term bearish outlook and trigger a short-covering rally. Consequently, the price of gold could rise to the $2,077 zone, aiming to reclaim the psychological threshold of $2,100.
The precious metal, however, remains confined within a familiar trading range that has persisted in recent days, situated below the supply zone of $2,040-$2,042. Meanwhile, geopolitical tensions in the Middle East show no signs of easing and continue to act favorably for gold as a safe-haven asset. Furthermore, the decline in US Treasury bond yields weakens the US dollar, providing additional support for the commodity denominated in US dollars.
On the H4 chart, the decline of gold from the peak of 2088 to the potential minimum in the coming weeks around 1980 is highlighted. Currently in a bearish channel, the price, after creating a new supply area, could retrace to it, creating a spike at the 0.62 Fibonacci level. I believe this could be interpreted as a confirmation signal for a short entry. I will await appropriate confirmations and keep everyone informed of the situation. Greetings and happy trading to all.
The precious metal, however, remains confined within a familiar trading range that has persisted in recent days, situated below the supply zone of $2,040-$2,042. Meanwhile, geopolitical tensions in the Middle East show no signs of easing and continue to act favorably for gold as a safe-haven asset. Furthermore, the decline in US Treasury bond yields weakens the US dollar, providing additional support for the commodity denominated in US dollars.
On the H4 chart, the decline of gold from the peak of 2088 to the potential minimum in the coming weeks around 1980 is highlighted. Currently in a bearish channel, the price, after creating a new supply area, could retrace to it, creating a spike at the 0.62 Fibonacci level. I believe this could be interpreted as a confirmation signal for a short entry. I will await appropriate confirmations and keep everyone informed of the situation. Greetings and happy trading to all.
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