- Gold likely to remain rangebound till support of 1276.70$ holds
- Gold is likely to trade in a tight range due to global growth concerns.
The yellow metal traced out a near-term top near 1298-1297$ in early Jan 2019 via the formation of a double top pattern. While the resulting downtrend stalled on Tuesday, the ensuing corrective phase has just come to an end as prices pierced at a parallel support level at 1276.70$, developed a double bottom.
Selling pressure remains very strong; a descending triangle is still evident in the four-hour chart. On top of this, the daily indicators are extremely bearish, hence near-term setting is negative. Under these conditions, a recovery above Jan high still seems difficult.
At the time of preparing this, the price is trading at 1285.50$ tad below the first resistance 1287.50$. Support just has been elevated from 1279$ to 1283$.
Caution will be ordered if the price does not rebound above the first resistance 1287.50$, this would pound a new downward wave (lower high) towards 1281$ and the double bottom at 1276.70$. A break below this accelerate the downward wave possibly towards 1270$ and 1264$ initially.
Three-day view: The next crucial resistance level to watch out is 1300$ on the upside while supports are located at 1280$ and 1276.70$.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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