Gold rate declines at the opening of today’s session and so far this process doesn’t have any technical reasons - signals of bulls’ weakening were not formed at the tip of upswing and resistance at 1875.00 looks much weaker than the 1894.47-1898.73 zone, where probably buyers are headed (black arrow).
This zone is also of interest for sellers, who will have minimal risks here while going short amid extension of the mid-term downtrend.
However we won’t rule out a scenario of downward reversal from current levels as well since downward structure got sufficient upward correction.
Thus the key support zone now is 1850.27-1860.00.
Local structure of gold got a break of the low at 1857.73-1859.92. Bulls managed to eliminate this problem quite quickly, but the fact remains - the market could lose upward dynamics. All this will create problems for growth at the resistance zone 1868.31-1871.46, where we would expect a new downward reversal.
Main scenario: Growth to 1868.31-1871.46, then decline in direction 1857.73-1859.92.
Alternative scenario: Break of 1871.46 will drive the extension of growth in direction 1894.47-1898.73.
Longs to 1868.31-1871.46 and probably to 1894.47-1898.73.
Shorts from 1898.31-1871.46 to 1857.73-1859.92.
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