Today’s trading session is of big importance for defining the further market’s movement for the coming several days. Two latest bars are inside ones suggesting a consolidation. If we suppose that the day will close like the daily bar looks right now that would be a good buy signal (“false downward break of the inside bars” setup). There are premises for that: the price resides within the very stiff pivot-zone 1843.30-1857.06. Moreover gold has to test 1906.39, where we have a mid-term offer zone according to O&U pattern (black arrow).
However the day has just begun, therefore it’s too early to discuss the close. We can’t rule out further downward movement in direction of the support zone 1810.17-1818.32 (red arrow).
Local structure has a bearish tone, but undergoes corrective stage. In order to keep the downtrend the sellers have to prevent a break of the resistance zone 1859.68-1861.42, where the two closest highs reside. Bulls have an opposite task respectively: to break this zone and settle above it. Thus the most likely scenario today will be new sell-offs from 1859.68-1861.42.
Main scenario: Growth to 1859.68-1861.42 followed by a steep downward reversal.
Alternative scenario: Break above 1859.68-1861.42 and further growth of gold in direction 1867.50-1870.00.
Longs to 1859.68-1861.42.
Shorts from 1859.68-1861.42 to 1846.95-1848.29.
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