Gold Price at Major Resistance – Bearish Potential Ahead
Gold price managed to recover the lost ground on an extremely weak USD. The bearish USD trend seen across the FX dashboard reached gold, too, as it bounced $100 from $1,760.
However, on its way up, it meets tough resistance at the horizontal base of the triangle it just broke recently. Having said that, it means that the triangle’s measured move is incomplete. Also, such a triangle, a non-limiting one according to the Elliott Waves Theory, must be retested by future price action.
Well, that retest just happens right here and now. As such, bears may be interested in shorting gold, especially considering the fact that the USD is so stretched.
Ahead of the NFP release, the danger is that the USD will reverse to make up for the losses incurred so far in December. If the gold price leads, as it did so far in the crisis, we may see a sharp reversal.
Gold Price Technical Analysis
Once the price of gold broke horizontal support, that area turned into resistance. At this point, bears may want to sell gold with a stop loss at the falling blue trendline (the upper edge of the triangle) and place a take profit equal to twice that distance or more, for an appropriate risk-reward ratio.