Gold might have carved a potential top around $1845 levels early this week, and could be preparing for a reversal. A break below the counter trend line support will confirm that the bearish reversal is on its way. Watch out for a break below $1770 levels going forward.
Gold rally between $1676 and $1847 seems to be corrective in nature, (3-3-5) labelled as A-B-C on the chart. Furthermore, it is almost testing the fibonacci 0.618 retracement which is seen around $1851 mark. The yellow metal could test and reverse lower again or drop from current price.
Gold has been dropping since $1960 levels until $1676 levels respectively. Also it has been retraced by a counter trend rally reaching $1845 recently. Ideally it should now turn lower towards $1600 levels until prices stay below $1875 resistance.
Immediate support comes in around $1770 levels as seen here. A break below that would confirm that bears are back in control and the trend has turned lower again. Please also note that a test of $1851/55 still remains possible before turning lower again.
Traders might position again towards the short side, with risk around $1875 levels, going forward. Only a sustained break above $1875 from here would change the above bearish structure.
Finacademy Technical Team
EURUSD has finally reversed lower from 1.2218 highs last week, after having drifted sideways for a while. The drop was much anticipated as bears have managed to take out over 300 pips since last Wednesday. They remain poised to target below 1.1700 in the near term.
US Dollar Index has raised through 92.00 levels as of now and bulls are looking poised to extend further through 95.00, 96.00 levels in the next few weeks. It is quite possible that they continue higher from here itself or after a pullback, but prices stay above 89.60 levels.
USDJPY breaks higher towards 110.80 levels yesterday as the technical direction was clear and discussed here. At times market awaits a trigger to push through its determined trend; it was the Fed interest rate yesterday that provided the same.