Commodities

Technical Analysis – Gold looking to rebound on 38.2% Fibonacci after pausing downtrend

Posted on June 3, 2020 at 10:32 am GMT

Melina Deltas, XM Investment Research Desk

Gold prices are heading sharply lower and have hit the lower surface of the Ichimoku cloud after bouncing off the 100-period simple moving average (SMA). The commodity has paused its bearish move at the 38.2% Fibonacci retracement level of the up leg from 1,614 to 1,765 at 1,718.

Looking at the technical indicators, the RSI is pointing slightly up in the negative zone, however, the MACD is decreasing below the zero and trigger lines.

If the price fails to dive beneath the 1,716 support it could challenge the 40- and 100-period SMA currently at 1,724 and 1,726 respectively, before touching the upper surface of the cloud at 1,729. Higher still, the 23.6% Fibo of 1,736 and the 1,745 resistance could come into focus, while the 1,754 hurdle could be a crucial level for investors.

Alternatively, a decline underneath 1,716 could send prices towards the 1,703 level, being the 50.0% Fibo, ahead of the 1,692 low and the 61.8% Fibo of 1,688. A strong move below these lines and towards the 1,661 – 1,671 region could shift the neutral outlook to bearish.

Summarizing, the yellow metal seems to be in a trendless market in the very short-term, however, a decline below the 61.8% Fibo could open the door for a bearish picture.

gold

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