Gold has changed little in the last few days after reaching the $1,800 psychological level. Is moving in a narrow range signaling a potential sell-off soon. Technically, the price is somehow expected to drop further after making another lower low.
XAU/USD failed to make a reversal pattern around the $1,800 which would have signaled a strong rebound, recovery. So, a deeper drop is imminent in the short-term. A decline and stabilization below the former low validate a broader bearish movement.
XAU/USD hovers right above the $1,800 and above the S3 (1,803) static support. A bearish closure under these downside obstacles should indicate a deeper drop towards the first warning line (WL1) of the descending pitchfork.
Now is pressuring the first warning line (wl1) of the former black ascending pitchfork which represented an important downside target after dropping below the lower median line (lml). The price has failed to retest the lower median line (LML) of the descending pitchfork signaling high selling pressure.
Sell a bearish closure under the $1,800 static support and use the warning line (WL1) as the first downside target. The 1,744 is seen as a downside target as well.
I believe that the outlook will remain bearish as long XAU/USD is trading below the median line (ML) of the descending pitchfork.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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