Home ForexForecasts Gold goes down; test the key trend line

Gold goes down; test the key trend line

by SuperiorInvest

· Gold goes down again today
· Remains below short-term SMAs
· Momentum indicators disappoint below average levels

Gold prices struggle with the short-term uptrend line drawn since mid-November and the 38.2% Fibonacci retracement level of the 1,810-2,145 bull wave in 2016.

Furthermore, the market fails to break above the 20-day and 50-day simple moving averages (SMA), indicating weak momentum. The MACD oscillator is moving down below its trigger line and near the zero level, while the RSI is pointing south after the 50 zone pullback.

If the bulls thirst for more bullish moves, they would try to break above the short-term SMAs and then test the resistance established by the 23.6% Fibonacci of 2,066. If successful, they could chart their course towards the restrictive region of 2,088-2,100 before the record high of 2,145.

On the other hand, the bears are probably interested in regaining control of the market and defending the November trend line. They could then face the important 2,000 region before resting near the occupied 50.0% Fib zone of 1,978, support at 1,974, and the 200-day SMA at 1,964.

In summary, gold bulls are attempting to cancel out the current bearish move that has occurred from the 2,088 high, but the path to the upside remains complicated, especially due to weak support from momentum indicators.

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