Gold has managed to push higher towards $1840/45 resistance zone as expected. Bulls remained poised to rally from $1785 lows over the last week and reached $1841 early hours of trade today. The rally might be exhausted and could face resistance here.
Gold has reached the fibonacci 0.618 retracement of the latest decline between $1876 and $1785 boundary over the last week. Bears might be poised to regain control from here hence watch out for a bearish signal around current price to trigger a selloff.
Furthermore, the metal is also facing resistance of the dropping trend line since $1960 highs as seen on the 4H timeframe. It is not yet mandatory that Gold would reverse lower from here but probabilities remain high.
Looking at the wave structure since $1960 highs, Gold had carved an impulse wave through $1802 levels sub dividing into 5 waves labelled as Wave 1. Also note that the subsequent rally towards $1876 was corrective and hence potential Wave 2 on the chart.
If the above structure holds well, Gold is well into its Wave 3 lower towards $1650 and further. For this count to hold well, prices should stay below $1876 going further. The metal might face resistance at this time around $1840/45 zone and a bearish signal could confirm.
Alternately, Gold might continue to rally towards $1900/10 mark, to terminate Wave 2 as an expanded flat corrective wave, before finding resistance again. Either way, the metal remain vulnerable for a bearish reversal until $1960 is intact.
Finacademy Technical Team
Gold prices dropped through $1773 lows on Thursday before finding support again. The drop from $1793 was in-line with price action of a gartley.
The US dollar index might have carved a lower high around 96.50 mark on Tuesday. The index dropped through 95.80 levels on Wednesday before finding some support.
USDJPY is soon approaching a formidable resistance zone around the 114.40-50 mark. The currency pair has been carving a corrective rally since 112.50 lows.