- Fails to capitalize on the overnight up-move and retreats from $1550 horizontal resistance.
- 100-hour SMA, followed an ascending trend-line might protect the immediate downside.
Gold came under some fresh selling pressure on Wednesday and eroded a part of the previous session’s strong up-move to the 1550 region – back closer to multi-year tops set on August 26.
The commodity on Tuesday broke through a two-day-old trading range resistance near the $1330-32 region, which coincided with 100-hour SMA and should now protect the immediate downside.
The mentioned region is closely followed by a support marked by a short-term ascending trend-line – around the $1526-25 region, which if broken might prompt some aggressive technical selling.
Meanwhile, technical indicators on the 1-hourly chart have again started gaining bearish traction and losing positive momentum on 4-hourly/daily charts, supporting prospects for an eventual breakdown.
Given a negative RSI divergence on the daily chart, acceptance below the $1526-25 region will indicate that a near-term top is already in place and set the stage for an extension of the corrective slide.
A sustained break below the $1520-19 area (weekly lows) will reaffirm the negative bias and accelerate the slide towards the $1510-09 intermediate support en-route the key $1500 psychological mark.
On the flip side, immediate resistance is now pegged near the $1540 region, albeit the key barrier remains near the $1550 horizontal zone – level needed to be broken for a bullish revival.
Gold 1-hourly chart
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