Gold: Bearish breakout of key support level, what next?

July 18 , 2018

 

As we have mentioned in our previous report that bears are dominating the bulls and it seems like they have pull up the socks to take it downside and we proved it. Well gold is making successively lower lows and lower highs on day to day basis. Yesterday was a crucial day as it has given downside breakout of key support level with a bearish marabuzo candlestick. It has made a 1 year’s fresh low of $1225 level.

 

A steep downfall in yellow metal and it is still under significant pressure while the US dollar was at daily highs. The rally of the greenback was among the drivers of gold’s slide. The US Dollar Index bounced shapely to the upside from multi-day lows. The index broke above 94.60 and is now positive of the week. The US dollar strengthened during Fed’s Chair Powell testimony at Congress.

 

 

 

By analyzing the daily technical chart we can observe that yellow metal falling down consistanctly from $1365 to $1325 level and breached the uptrend line on the daily chart. A bearish marabuzo candlestick below the moving average line is supporting the bears Odds are completely in favor of bears and intraday bias remains bearish on the gold as long as $1250 level remains intact. A daily closing below the $1220  level will open the way towards the $1200 level which is a psychological level.

 

 

The bears are taking the charge and dominating the bulls at every nook & conrner.Short term to intermediate term trend is down and in a downtrend market always sell on rise will be profitable strategy. The RSI is also supporting the bears however, RSI has arrived into oversold territory so some correction can’t be ignored but that should be taken as further selling opportuntiy and a bearish crossover has been occurred on the MACD indicator also which is also generting bearish reversal signal for the time being. The 1200 is immediate support level followed by 1190 level whereas 1250 level is immediate resistance level followed by 1270.

 

 

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