Gold had raised through $1916 highs yesterday before turning lower again. The yellow metal remained just shy of $1922 mark, which is fibonacci 0.618 retracement of the entire drop between $2075 and $1676 levels respectively.
If the recent price action is a lower degree wave iv within Wave C, Gold might rally back towards $1922/25 levels to terminate wave v. Alternately, a break below $1880/82 would confirm a bearish reversal ahead.
The entire wave structure from $2075 highs is a 3-3 until now. The drop between $2075 and $1676 was in 3 waves a-b-c; while subsequent rally towards $1916 is also in 3 waves. If Gold is unfolding as a flat, we can expect a 5 wave drop from here.
Gold might drop through $1450 levels in that case. Alternately, if the yellow metal is unfolding as a larger degree ending diagonal, we could witness a continued drop towards $1046 and beyond. Either way, the most probable output is a decline from current levels.
Gold faces immediate resistance around $1922, followed by $1960; while support comes in around $1882, followed by $1800 levels respectively. It remains to be seen how price action behaves around $1882 levels in the near term.
Most traders might prepare to initiate fresh short positions around $1900/20 levels with risk above $1960 over the next few trading weeks.
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.