Ahead of the US CPI data on Thursday, gold has turned lower after reaching a major technical zone between $1878ish to $1900ish, as you can see on the daily chart of the metal.
The lower end was the low created when gold rallied hard into resistance earlier in the year in 2022, which ultimately caused a massive breakdown. Now back to the same level, we are seeing a bit of a pullback here. The upper end of this range marks the 61.8% Fibonacci level against last year’s high, as well as being a psychological round handle.
The bears would need to see some bearish price action here to confirm at least a temporary top is in as the trend has been bullish in recent months. Without such confirmation, the path of least resistance would remain to the upside.
Today's bearish reversal could be the trigger I am after, but with CPI to come, take this with a pinch of salt.
For the bulls, a clean break out above this zone would further enhance their control. Let's wait for the market to tip its hand before deciding on a directional bias.
By Fawad Razaqzada on behalf of FOREX.com
The lower end was the low created when gold rallied hard into resistance earlier in the year in 2022, which ultimately caused a massive breakdown. Now back to the same level, we are seeing a bit of a pullback here. The upper end of this range marks the 61.8% Fibonacci level against last year’s high, as well as being a psychological round handle.
The bears would need to see some bearish price action here to confirm at least a temporary top is in as the trend has been bullish in recent months. Without such confirmation, the path of least resistance would remain to the upside.
Today's bearish reversal could be the trigger I am after, but with CPI to come, take this with a pinch of salt.
For the bulls, a clean break out above this zone would further enhance their control. Let's wait for the market to tip its hand before deciding on a directional bias.
By Fawad Razaqzada on behalf of FOREX.com