Gold markets fell rather hard during the week, crashing into what I think is significant support in the form of the $1275 level. At this point though, the fact that we are closing at the very bottom of the candle stick tells me that the sellers are going to be very aggressive. On a break down below the bottom of the candle stick for the week, the market is more than likely going to go looking towards the $1250 level. Beyond there, we could drop as low as $1225 based upon the head and shoulders pattern on the weekly chart.
Gold Technical Analysis Video 22.04.19
The other possibility is that we could spend this week trying to recover losses from last week, but very likely we are going to find resistance at the top of the candle stick. Overall, this is a market that looks as if it is ready to roll over again and continue the overall consolidation that we have seen for some time. Remember that the US dollar can greatly influence what happens here as well, as gold quite often will move in the opposite direction. (Although the two don’t necessarily have to move in a negative correlation, despite what many people will tell you. For an example of this all you have to do is look at the 1980s.)
At this point in time, the chart looks very sick and it does seem as if the sellers have taken control over the last month or so. If that’s going to be the case, it’s very likely sellers will overwhelm soon.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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