Gold Bulls Slowing down reaching $1600 price area may result Bearish. Despite the strong Bullish trend in place, certain correction can be observed. Let’s check Gold Technical Analysis for more levels and insights.
February 3, 2020 | AtoZMarkets.com – Gold bulls are currently facing strong Bearish pressure below $1580 area after rejecting off the $1592. The price has been quite volatile with the recent Bullish momentum leading the price higher.
The crisis in Chinese economy due to Coronavirus lead to decrease in China’s GDP to fall to 5.5%. The most shocking thing about the recent Gold Bearish pressure is that, it correlated with the Chinese Stock Market. Despite being the safe haven investment at current market scenario, Gold’s struggle along the way may be temporary.
As per current price position, Gold had 4% gain throughout January 2020 which is the highest since last 5 months. So, current Bearish pressure may be short along the way and Bulls may regain momentum in the coming days.
Gold Bulls slowing down may result in Corrections
Gold is currently quite impulsive with the recent Bearish momentum. After the rejection off the $1592 area, the price managed to sustain the Bearish pressure and push Gold below $1585 recently.
image: Gold 4 Hour Chart
According to 4 hour chart, the price recently formed Bearish Divergence while pushing higher after the bounce from $1560 area. The price has been quite consistent with the recent bullish momentum but currently being engulfed by the Bears. The dynamic level of 20 EMA is currently being intersected while the price is proceeding lower towards $1570 support area. As the price progress lower, it might face strong support of Kumo Cloud as well which may confluence the upcoming Bullish move. Though Gold Bulls slowing down currently is an indication of Bearish intervention but the Bias is still Bullish.
Despite the Bearish Divergence in process, the Gold Bullish trend is still quite strong. As a result, a bounce off the $1570 may lead to further upward pressure. As the price progress higher, there are 3 strong resistance which might act as barriers along the way higher. The resistance at $1585 may remain weak in comparison to resistances at $1592 and $1600 area.
To conclude, Gold Bulls slowing down may result in push lower as per current Bearish momentum. But a bounce off the $1570 will lead the price higher. After certain correction at the edge of $1570, the price will have higher probability to continue with the target higher at $1600.