By ForexTime
A correction wave ensued as the market sought some balance and the possible profit-taking of market participants began taking its toll. In the process, bears are lurking in the background with prices pressing into the weekly support level. Zooming into the lower timeframe, a short opportunity is a possibility with our eyes on the 4-hour charts for more insight.
Before we break down the technicals, it is worth noting that gold is likely to be influenced by a string of incoming US data that could impact Fed cut expectations. All eyes will be on the Fed minutes, ISM, and Jolts data which could inject gold prices with fresh volatility later today.
Redirecting our attention back to the technicals, the 4-hour chart provides further understanding by utilizing the fractal nature of the market structure. Here the price dipped below the 50 linear weighted moving average and made a lower bottom in the process. If the selling pressure continues to build and the price goes below 2055.82, then a short opportunity will be present. Both the Momentum Oscillator and the Moving Average Convergence Divergence (MACD) also verify the decline in momentum.
Attaching a modified Fibonacci tool to the trigger level at 2055.82 and dragging it to a last top at 2078.99, four possible targets can be determined:
Free Reports:
Risk management needs to be tight because of the notorious volatility of correction waves in general.
If the price at 2089.99 is broken, this scenario is no longer sound.
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