Gold Weekly – Bearish momentum on the rise

The Gold market on the Weekly time frame was in an extended uptrend until the 2^nd of August 2020 recording a higher top at 2074.87. That was followed by bearish pressure that upset the bulls, thus moving the market lower.

After the higher top (at 2074.87), the market broke through the 15 and 34 Simple Moving Averages and the Momentum Oscillator crossed into negative terrain as it pierced through the zero baseline. Both technical indicators and the market structure of lower tops and a lower bottom confirmed that the bears exercised enough pressure to start a new downward trend.

A possible critical support level formed on the 29^th of November 2020 at 1764.53, after which the bulls started pushing back. They failed near a resistance level at 1959.39 on the 3^rd of January 2021 and the bears took back control of the market.

It is important to note that although the downward trend is confirmed from a structural point of view (consecutively lower tops and bottoms), how far it might continue is always unsure, so risk management is essential.

If gold breaks through the critical support level at 1764.53 and makes another lower bottom, three possible price targets may be calculated from there. Applying the Fibonacci tool to the bottom of the support level at 1764.53 and dragging it to the resistance level at 1959.39, the following targets may be considered. The first target can be projected at 1644.11 (161 %). The second price target may be foreseen at 1449.25 (261.8%) and the third may be expected at 1133.96 (423.6%).

If the resistance level at 1959.39 is broken, the above scenarios are annulled, and appropriate action must be taken.

As long as sellers maintain a negative sentiment and supply keeps overwhelming demand, the outlook for the Gold Market on the Weekly timeframe will remain bearish.

For more information, please visit: FXTM

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Theunis Kruger

Share

Tweet

Safest Forest Brokers 2020

	Broker	Info	Best In	Customer Satisfaction Score
#1	Your capital is at risk Founded: 2011	Global CFD & FX Broker	BEST FOREX BROKER Visit broker	5
#2	CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Founded: 2010	Global Forex Broker	Low minimum deposit Visit broker	4.9
#3	Your capital is at risk Founded: 2014	Global Forex & CFD Broker	Best Trading Conditions Visit broker	4.9
#4	Your capital is at risk Founded: 2014	Global Forex Broker	BEST SPREADS Visit broker	4.8
#5	80.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Founded: 2008	Global CFD Broker	Best Trading App Visit broker	5

Forex Fraud Certified Brokers