Gold declined from very sensitive zones, where the symmetry of Fibonacci ratios seen on the provided graph has created potential reversal zones for a bearish harmonic butterfly pattern with targets at 1558.00 -38.2% retracement of CD leg- while 1578.00 -23.6%- is the technical obstacle that could limit the bearish effect of this pattern. Conversely, the AB correction which was very close to 88.6% retracement of XA leg suggests a new pattern recently published by Scott Carney called Deep Crab pattern. The Deep Crab pattern presents PRZ -potential reversal zones- at 161.8% projection of XA leg after drawing B point at 88.6%. In the interim, we have been able to catch bearish candlestick and negative sign on Stochastic; whilst AROON and SMA 50 are positive. Thereby, we prefer staying aside until an actionable setup presents itself to see if the completed harmonic pattern will send the metal towards 1558.00 or the Deep Crab will be completed within the coming hours at 1645.00.
If the metal continued moving downwards, the IM formation mentioned in our previous report will not be negated unless 1525.00 is breached.
Follow the articles section on the homepage where we will present and educational article about Deep Crab pattern sooner.
The trading range for today is among the key support at 1558.00 and key resistance now at 1627.00.
The general trend over the short term basis is to the upsidetargeting 1694.00 per ounce as far as areas of 1430.00 remain intact with weekly closing.
|Recommendation||Based on the charts and explanations above our opinion is, staying aside until a clearer sign appears to pinpoint the upcoming big move.|