Bearish Candlestick Pattern Today
A bearish continuation will be triggered on a drop below today’s low, which is 1,979 at the time of this writing. Nonetheless, potential support areas include the uptrend line, and the 50-Day EMA, currently at 1,943. Other price areas to watch for support include a prior swing low at 1,970 and a swing high at 1,953. Each is marked with a solid black line on the chart.
Rally Back Above 1,988 Shows Strength
If a bearish continuation signal does not trigger, then watch for a possible attempt to go higher before a pullback. If gold can rally back to above yesterday’s high of 1,988 and stay above it, there is the capacity to keep rising thereby negating today’s signs of weakness. A similar switch occurred yesterday when gold reversed Wednesday weak performance and ending. However, a bearish signal never indicated further weakness never materialized.
50-Day EMA Support is Key
If gold continues to hold above its 50-Day EMA during weakness it continues to have a chance at new trend highs. The rising trendline can be used as a guide but the 50-Day line provides a more significant support area for the developing trend. Momentum off the recent 1,932 swing low has been healthy and is a bullish sign for the quality of the trend. Next, further follow-through is needed.
If a deeper retracement follows next week, finding support at the uptrend line would indicate greater strength than a decline below it. Moreover, given that this week is an outside week, gold may decide to again test lower levels and reach the bottom of the broadening formation.
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