Gold has carved a series of lower lows and lower highs since $1965 levels, which is acting as a formidable resistance for now. The yellow metal has followed the trend line resistance and managed to hit $1717 lows over the last week.
Bears might be inclined to print yet another low around $1700/10 levels before producing a potential pullback rally. We have marked the area to expect short term bullish bounce on the chart view presented here. It is also fibonacci 0.618 extension of earlier drop between $1965 and $1802 levels.
Looking at the wave structure since $1965, Gold seems to have carved Waves 1 and 2 around $1802 and $1876 respectively. Since then, the yellow metal has been working on Wave 3 lower and might terminate around $1700/10 zone.
If the above structure unfolds accordingly, Gold might produce a counter trend rally towards $1770/80 zone or up to $1800 as Wave 4 as pointed on the chart here. Also note that Gold has print fresh intraday lows around $1713 mark as we prepare to publish this article.
With bullish divergence seen on RSI, potential remains for Gold to produce a bullish bounce from close to $1710 zone. If bulls are successful, the near term target for them could be towards $1750/55 zone if not further.
Also note that trend line resistance is seen to be passing around $1800 zone along with fibonacci 0.382 retracement of Wave 3. Gold is expected to face resistance if bulls manage to push prices through $1780/1800 zone in the next 1-2 trading sessions.
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.