Gold opened high and fell yesterday. It briefly rose in the morning and then fell under pressure. It fluctuated below the resistance of $3252 throughout the day.
The European and American markets tested $3250 several times without success, but the rebound momentum was weak, which was in line with the expected volatile trend. Today, it tested yesterday's low of $3206 again. If it breaks down after repeated tests, the decline may accelerate.
Technical analysis
Short-term trend: Bearish, pay attention to the triangle convergence break
Gold prices are still in a state of volatility, and the short-term trend is bearish.
The hourly line shows a triangle convergence pattern. If it falls below $3206, it may accelerate downward, and the target is the support area of $3154-3120. If it rebounds, the key resistance above is $3222-3232, and the strong watershed is at $3240. A breakthrough may temporarily slow down the decline.
Daily level: M head pattern is being constructed, beware of the risk of continued decline
The recent rebound has failed to stabilize at $3250, and the probability of closing negative today is high.
If it falls below $3120, the daily level large M head pattern is confirmed, and the downward target can be seen at $2956 (bottom of wave 4).
Key support and resistance
Resistance level: 3222-3232 (short-term), 3240 (watershed), 3252 (key for long and short)
Support level: 3206 (yesterday's low), 3154 (previous low), 3120 (key break point)
Trading strategy suggestions
Short-term operation:
If it rebounds to $3222-3232, you can try short orders, stop loss above $3240, and target $3190-3170.
If the European session continues to be weak, the US session can consider a second short order, but be wary of possible rebound corrections after 22:00.
Follow-up of the break:
If $3206 is effectively broken, you can follow the trend and go short, with a target of $3154-3120.
If it unexpectedly breaks through $3,252, short positions should be cautious, and the upward target is $3,286-3,322.
Medium- and long-term outlook
Although the short-term correction pressure is relatively large, the gold bull market pattern has not changed.
The Fed's interest rate cut expectations and the weakening trend of the US dollar have not changed, and gold still has the potential to rise in the medium and long term.
The current decline is a technical adjustment, aimed at correcting the overheated market sentiment after the abnormal surge in April. Although the correction is large, it is within the scope of normal correction.
Conclusion: In the short term, gold is still dominated by shorts, and the focus is on the breakout of the $3,206-3,120 support area. If it breaks down, it may accelerate the bottoming out; on the contrary, if it stands above $3,250, the adjustment may come to an end. It is recommended to focus on rebounding high altitudes in trading, and pay attention to possible market washouts.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.