With the breach of 1624.00 and consolidation below it, our positive expectations failed yesterday, while the bullish 0-5 harmonic pattern failed as well. Currently, the metal is stable below 61.8% Fibonacci correction of the bullish wave shown above, while there is possibility gold might reach areas around the level of 1585.00-80.00, where this level is near 78.6% Fibonacci correction. The fact that supports our outlook is the possible formation of the intraday butterfly structure, where the potential reversal zone resides the mentioned areas, but we signal that the level of 1608.00 is another potential reversal zone and a breach of this level supports the extension of the downside movement. Consolidation below 1656.00 is necessary for our negative outlook to remain valid.
The trading range for today is among the key support at 1580.00 and key resistance now at 1673.00.
The short-term trend is to the upside with steady weekly closing above 1475.00 targeting 1945.00.
***New York Candlesticks***
|Recommendation||Based on the charts and explanations above our opinion is selling gold around 1624.00, targeting 1608.00, 1598.00 and 1585.00 and stop loss with 4-hour closing above 1656.00 might be appropriate.|