Overview: – From past couple of days we are witnessing selling in the pair. The way bears are reacting it seems like they are approaching the $1800 level but only $1850 is reacting as a stumbling block for bulls. The intermediate-term trend is up but the short-term trend is down. Well, the way bears are reacting it seems like bears are going to win this battle and heading to the south side. We will get further clear confirmation below the $1850 level where bears will get more panic pressure.
Technical Analysis: –From a technical perspective, we can see that an inverted flag pattern is in process of formation and heading to the south side. On 4 hourly chart pair is trading below all major and minor EMA lines which is providing us a bearish signal..A bearish crossover on the MACD indicator is still favoring the bears on daily chart which is providing us a bearish signal. Odds are in favor of bears and daily to weekly bias remains bearish on gold as long as $1900 level remains intact. The way gold is trading and moving on the daily chart it seems like $1800 and $1750 level is the unfinished target of bears. RSI has arrived into oversold territory which indicates that some correction can’t be ruled out, so this correction can be taken as a selling opportunity.
What next:-The bears are dominating the bulls leading in the game and playing at the front foot and it seems like bears are going to continue with this game and will dominate the bears in the near term full of pace. The $1820 is made or break level can be considered as key support level followed by $1800 where $1880 is a key resistance level followed by $1900 level.
Trade idea:- Based on the chart and study above we would suggest that go for sell at $1850 for a target of $1800 and $1780 level with a strict stop loss of $1890 level.
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