Gold Price Forecast: Bearish Sentiment Grows Amid Failed Breakout -

Gold is at risk of failing yesterday’s bullish breakout above the 50-Day MA and downtrend line. Friday’s price action is set to end with an outside day. And, at the time of this writing gold continues to trade bearish, below yesterday’s low of 2,328, and below three trendlines plus the 50-Day MA. Each has now failed to hold as support during today’s pullback. This is not bullish behavior and puts recent lows at risk of being tested as support again, if not broken.

Bearish Weekly and Daily Signal Below 2,307

This week’ slow of 2,307 can be seen as a price level with some significance. Being a weekly low, a drop below it will signal a bearish continuation in the weekly time frame. Larger time frame patterns tend to influence lower time frame patterns. That is the fractal nature of the financial markets. Therefore, the higher time frame can take priority relative to a trader’s time horizon.

Daily Bear Flag

A drop below 2,307 on the weekly chart can be seen on the daily chart as a decline below the short rising trendline across support of recent daily lows. On the daily time frame the price action of the past two weeks has taken the form of a small bear flag. So, a drop below last week’s low would provide a bearish signal for both time frames, the daily and the weekly. It should also be noted that this week is on track to end with a bearish shooting star candlestick pattern. Although it is not occurring at the top of a trend it still provides a sign of short-term bearish sentiment.

Rally Above 2,370 Needed for the Bulls

There is not much set up yet on the chart for bullish indications other than a breakout above today’s high of 2,370. Since the first breakout attempt is already showing weakness, a continuation of the consolidation phase may continue before much follow through occurs, either up or down. Nonetheless, if natural gas breaks out above this week’s high of 2,369 next week, it could continue to see an acceleration in price towards the most recent record high of 2,450.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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