From 88.6% retracement of CD leg of the harmonic butterfly pattern, which meets the harmonic resistance from A to C, gold declined. This decline clarifies the need for some kind of correction as momentum indicators are showing overbought signs. Besides, the metal failed to maintain levels above 1410.00-1416.00 and that is why we believe that today's trend might be bearish. Gold may retest 76.4% Fibonacci level, followed by 61.8% of CD leg and that means we may revisit 1395.00, followed by 1380.00. Note that, areas of 1420.00 should hold to keep this scenario valid.
The trading range for today is among the key support at 1362.00 and key resistance now at 1449.00.
The general trend over the short term basis is to the downside, targeting $ 1208.00 per ounce as far as areas of 1485.00 remain intact.
|Recommendation||Based on the charts and explanations above our opinion is, selling gold around 1406.00 targeting 1380.00 and stop loss with a four hour closing above 1420.00 might be appropriate.|