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
USDJPY could be progressing into a counter trend rally toward 114.30-50 zone in the next few trading sessions.
Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.
The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.