The lowest price of gold reached yesterday was 1701.71. This means that some limit orders of the buyers at 1700.00-1701.71 are still to be triggered. Subsequently, we don’t rule out a second testing of this zone.
At the same time today’s session goes inside yesterday’s range (inside bar pattern, red round mark). Should the day close this way, the market will get a strong signal for upward reversal in direction 1760.43.
Local upswing is potentially capped by the resistance zone 1735.90-1740.22, from where the price most likely will start declining in direction of support 1716.85-1720.00. Such a trajectory fully matches a scenario of an inside bar forming on the daily chart.
But the bulls might well face problems right at the pivot 1716.85-1720.00, which is being tested right now.
Main scenario: Growth to 1735.90-1740.22 followed by a pullback to 1720.00, 1716.85.
Alternative scenario: Decline from 1716.85-1720.00 to 1700.00 followed by a steep upward bounce.
Longs to 1735.90-1740.22.
Shorts from 1735.90-1740.22 to 1720.00, 1716.85.
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