Daily Market Analysis and Forex News
Gold bears are making up for lost time
Gold prices on the H4 time frame traded in a bullish trend that lasted until 13th April when a higher top formed at 2048. Prices briefly broke through a weekly resistance level but bears started testing the waters and the resulting supply increase caused a break back through the weekly level.
Further confirmation of the increasing bearish presence was seen when prices broke through the 15 and 34 Simple Moving Averages and the Momentum Oscillator followed suit by breaking through the 100 baseline into bearish ground.
A possible critical support level formed when a lower bottom was recorded on 17 April at 1981.18. The bulls pushed the price higher in a bid to gain supremacy again but encountered a resistance level that formed earlier in the same session at 2015.05.
On 19 April, gold bears broke through the critical support level at 1981.18 and three possible price targets were calculated from there. Attaching the Fibonacci tool to the lower bottom at 1981.18 and dragging it to the resistance level at 2015.05, the following targets were determined. The first target was estimated at 1960.25 (161.8%). The second price target might be expected at 1926.38 (261.8%) if the price manages to break through a weekly support level. The third and final target might be estimated at 1871.58 (423.6%) which is located at the next weekly support level.
If the resistance level at 2015.05 is broken, the current scenario is longer valid and risk must be managed carefully.
As long as bears continue to dominate the market, the outlook for Gold prices on the H4 time frame will remain bearish.