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Gold Forecast Video for 21.04.23 by Bruce Powers
Gold continues to hold above Wednesday’s support at 1,969 but has not provided additional signs that it can go further. The next indication of strengthening would be on a daily close above Wednesday’s 2,008 high. It looks like it might do that today. Gold has been rising in a parallel trend channel or ascending flag pattern for the past month. A continuation higher off the week’s low would have gold targeting the top trendline of the flag.
A Bullish Hammer Pattern Formed Wednesday
On Wednesday, gold completed a bullish hammer candlestick pattern. This provides a little additional evidence that yesterday’s low may have been the completion of the short-term pullback. You can see on the chart how Wednesday’s low bounced right off the lower trendline of the flag. That’s the third point for the line thereby making it a little more significant than it would be with only two lows for drawing the line.
Bearish Signals Below
Alternatively, a drop below the low of this week at 1,969 would indicate a breakdown of the rising flag and likely lead to a deeper retracement. A rising flag has characteristics like a bearish ascending wedge. In each case the price rises overall as it consolidates. Momentum dies out during this process and eventually selling intensifies as buyers lose interest.
Nevertheless, there are a couple of support levels near the low that should be watched at the same time. The 34-EMA, which is at 1,966, and was successfully tested as support yesterday and held. Therefore, going forward it could be telling again. Then there is a price range from around 1,960 to 1,957. That range consists of previous resistance from the prior swing high and a couple of Fibonacci support levels. A bearish RSI divergence is also apparent and marked with a falling trendline.
Gold Expected to Maintain Intermediate Uptrend
The good news for the bulls is that a retracement may not be too deep if it does occur. It looks like gold could find support before or at the uptrend line. Use the Fibonacci levels as well for a guide. The classic target from the breakdown of a rising flag would be the beginning of the pattern, which is at 1,934.
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This article was originally posted on FX Empire
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