Gold remains under pressure; maintains a short-term bearish bias.
Gold remains under pressure as it is training near its opening level over the last few hours. The price struggled below the upper Bollinger band at 1327 after the sharp gain on Friday. The short-term technical indicators are bearish to neutral and point to a weakness in the market.
Looking at the 4-hour chart, the Relative Strength Index (RSI) is flattening in the positive territory, while the stochastic oscillator is creating a bearish cross within its moving averages in the overbought zone, signaling a downside reversal is nearing. The 20 and 40 simple moving averages are moving near 1317 and 1324 and are acting as strong support levels for the price at the time of writing.
Upside moves are likely to find resistance at 1329. This is the 38.2% Fibonacci retracement level of the down-leg from 1366 to 1307. Rising above this area could drive the precious metal towards the 50.0% Fibonacci level near the 1366 resistance barrier and turn the bias to bullish.
In the short-term, the bearish phase remains in play especially if gold prices continue to trade below the upper Bollinger band. To the downside, the next level to have in mind is the 1320 support near the 23.6% Fibonacci mark. A drop below this area could take the price closer to the lower Bollinger band near 1307 barrier.
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