February 23, 2021
Gold has been following the resistance trend line since $1965 highs as seen on the 4H chart presented here. The yellow metal had dropped through $1760 lows last week before finding some support again. It has opened this week higher and is producing a counter-trend rally towards $1820/25.
The yellow metal is soon approaching short-term resistance around $1820/25 zone. As seen on the chart here, the metal faces trend line as well as Fibonacci 0.618 retracement around $1820 mark. Bears might be poised to take control back from there.
Alternately, a push-through trend line resistance will open doors for a push towards $1855 levels, which is marked as immediate price resistance here. A much complex corrective wave might be underway towards $1880/1900, if Gold breaks above $1855 mark.
The yellow metal might hit the Fibonacci 0.618 retracement of its entire drop between $1965 and $1760, which is seen towards $1880/1900 zone if it breaks trend line resistance and eventually above $1855 going forward.
Until Gold remains into the sell zone of the above trend line resistance, we favour a bearish turn from $1820/25 zone. Downside potential remains towards $1650 and $1550 levels respectively. It would be interesting to see how bears react around $1820.
Gold is a clear sell on the rallies chart and would turn bullish only if $1965 is taken out. The yellow metal is also facing past support turned resistance around $1810/15 levels, marked as Wave 1 on the chart here. Be prepared for a potential bearish turn from current price action.
Finacademy Technical Team
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