Gold technical analysis: Bears challenge a key pivotal support near $1400 mark
|- Gold remained under some selling pressure for the third consecutive session on Wednesday and dropped to one-week lows, around the key $1400 psychological mark in the last hour.
- The mentioned handle coincides with a key pivotal point - 200-period SMA on the 4-hourly chart, which if broken would set the stage for an extension of the ongoing downward trajectory.
Technical indicators on the mentioned chart have been gaining negative traction and support prospects for an eventual bearish breakdown. However, oscillators on the daily charts - although have been losing positive momentum, maintained their bullish bias and warrant some caution before placing any aggressive bets.
Meanwhile, a follow-through selling is likely to accelerate the fall further towards the $1390 region – marking near one-month-old ascending trend-line support. The said trend-line, along with another descending trend-line constitutes towards the formation of a symmetrical triangle on short-term charts
The symmetrical triangle is seen as a continuation pattern - bullish in this case and represents a brief pause before the next leg of a directional move. Hence, any dips towards the triangle support, around the $1390 region might still be seen as a buying opportunity and should help limit further downside.
On the flip side, the $1406-07 region now seems to act as an immediate resistance, above which the momentum could get extended towards $1415 supply zone. A follow-through up-tick might stall near the triangle resistance – around the $1421-22 region, which if cleared will set the stage for the resumption of the prior bullish trend.
Gold 4-hourly chart
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