Gold finds obstacle near 23.6% Fibonacci; has a short-term bearish bias.
Gold prices are struggling below the 1285 mark, which is the 23.6% Fibonacci retracement level of the down leg from 1346.60 to 1266.29, a strong resistance during the past few weeks.
From the technical point of view, in the 4-hour chart, the stochastic oscillator is turning lower in the overbought territory, creating a bearish crossover between the %K and %D lines, while the RSI is sloping down in the positive area, suggesting a possible negative movement.
If the market reverses even lower, immediate support could come between the 40- and the 20-simple moving averages (SMA) currently at 1279 and 1276 respectively. Another downside move may retest the 1266.29 – 1265 support zone before the price touches the lower boundary of the descending channel around the 1260 barrier.
Otherwise, the yellow metal could retest the 23.6% Fibonacci (1285) before resting near the 1289 resistance. A jump above the latter would end the consolidation phase within the 1266.29 – 1289 region and violate the descending channel to the upside, opening the way towards the 38.2% Fibonacci of 1297.
In brief, the price has been developing within a downward range over the last six weeks, while in the medium-term the price remains negative as well.
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