Friday a bullish pinbar was formed at the tip of downswing - a signal of upward reversal. Given the gap during session opening on Monday, there are big odds for growth of the gold rate.
The closest bulls’ target might be the accumulation area 1726.00-1734.00 (and the pivot-level 1760.43 in a medium term outlook).
Within the local structure a high was broken at the psychological level 1700.00 also suggesting upward reversal and probable extension of growth in direction 1722.88. Retest of the 1700.00-1701.00 zone would look reasonable, where most likely pending orders of the buyers are concentrated (black trajectory).
However we can’t rule out a deeper pullback to 1687.17 (red scenario), where a promising demand area resides formed by the double bottom and O&U patterns.
Main scenario: Pullback to 1700.00-1701.00 followed by growth to 1722.88.
Alternative scenario: Decline to 1687.17 followed by a reversal in direction 1705.00-1706.00.
Longs from 1700.00-1701.00 and 1687.17. Target is 1722.88.
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