Gold bullish potential remains towards $1890/1900

Written by

February 16, 2021

Technical Analysis:

Gold is likely to complete its down Gartley which began from $1785 lows over the last week. The primary impulse boundary is between $1965 and $1802, which is marked as Wave 1 on the chart here. Wave 2 might have terminated around $1875 levels or is unfolding as an expanded flat.
If Wave 2 is in place around $1875 levels, Gold shall continue lower from here and push through $1675 and further in the coming weeks. Alternately, if Wave 2 is taking a more complex shape, we might witness a rally towards $1890 levels.
Also note that $1890 is very close to the Fibonacci 0.618 retracement of earlier drop between $1965 and $1802 levels respectively. Furthermore, a Fibonacci convergence is also seen towards $1895/95 levels, which can produce a strong bearish reaction.
Bulls might remain determined to produce a short term rally towards $1890 zone before giving in to bears. For the above structure to hold, prices must stay above $1875 interim support. Bears might be back in control from close to $1890 zone.
Once the down Gartley structure is complete, Gold is expected to turn bearish again with risk at $1965 levels. Bears would remain in control until prices stay below $1965 highs going forward. A push through $1965 would open doors for a test of $2075 levels.
Gold remains bullish over the short term until prices hit resistance through $1890 zone. Thereafter the metal turns bearish against $1965 levels respectively. Trading opportunities are seen to be on both sides for now.

Prepared by

Finacademy Technical Team

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