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Gold Forecast Video for 24.04.23 by Bruce Powers
Another test of support today as gold dips briefly below the uptrend line at the lower border of a rising bearish (possibly) flag and then bounces. Nevertheless, it looks like gold will close back above the line and hold above support for now. Support was at today’s low of 1,972 and close to hitting support at the 34-Day EMA trend indicator. The 34-Day line is currently a good trend indicator to watch for the short-term.
A Daily Close Below 1,969 is Bearish
There is a support zone in gold from this week’s low of 1,969 down to the previous swing low at 1,950. However, given that this week is almost over, the swing low to be most concerned with heading into next week will be this week’s low. A daily close below this week’s low will trigger a breakdown of a bearish rising flag. Subsequently, weakness is further confirmed on a daily close below the 1,950 level. Downside targets would then include the Fibonacci retracement levels noted on the chart and the uptrend line.
Rising Flag is Bearish
A rising flag is a potential bearish reversal consolidation pattern as price is trending higher in and contained within a small upward sloping parallel trend channel. Normally, rising flag patterns are seen in downtrends and are continuation patterns. As long as price stays within the borders of the flag gold may continue higher. It can even rise to a new trend high yet stay within the flag structure.
ABCD Pattern Targets New Trend High
For example, gold could trend higher within the channel to eventually complete an ABCD pattern where the CD leg matches the AB leg. A 100% match occurs at an upside target of 2,067, as seen on the chart. We can’t see when that price may be hit, but it is clear from the chart that unless there is a sharp spike higher in the next day or two, gold will be reaching that target while remaining within the borders of the flag. If it trades within the borders of a developing bearish pattern, a breakdown remains a risk.
At the same time, until the pattern triggers, it is not yet valid and could evolve into a different pattern. Price could break out through the top trendline for example and give a bullish signal rather than bearish.
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This article was originally posted on FX Empire
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