At the start of the new week, Gold crashed to 1193 from 1203 after the Bank of China lowered required reserve ratio (RRR) for some lenders by 1%. Will price break below 1190?
On Sunday, the People’s Bank of China (PBOC) lowered the required reserve ratio (RRR) by 1% for some lenders. This move was part of the cautionary steps by the bank in the on-going trade war. The US dollar continued upside after recovering from the last employment data release. Last week, Gold closed around 1203. After the PBOC decision, the Gold market started the week bearish in the Asian session. Price dropped almost 100 Pips to 1193. 1194 is an important intraday support level. A significant break below 1194 will most likely see price at 1180.
Gold Technical Overview and Important Price Levels
In the last update, the chart below was used.
The dip from 1214 to 1180 successfully completed a double zigzag corrective pattern and an upsurge followed quickly to 1208 (a resistance zone). The current bullish force will require to break above the 1205-1214 barrier to continue. From 1180, price started a bullish impulse wave expected to be wave C of a larger bullish correction of the 3rd wave of a potential impulse wave from 1160. Looking closer and taking note of important levels, the current intraday dip should stay above 1194 to sustain and keep hope for a bullish breakout. A dip below 1194 might turn things bearish again. 1194, 1180 and 1160 are the important support and bearish target levels. 1208, 1214 and 1220 are important resistance and bullish target levels.
Price was held below 1208 and crashed to 1193. Will price decline further to 1180? The chart below shows the new update.
The drop from 1208 looks corrective. The rally from 1180 to 1208 might have completed an impulse wave. The bullish scenario is still holding despite the 100 Pips drop. A break out of the 1208-1193 channel upside would confirm the bullish scenario. A break above 1208 could be followed by a fast break out of the bigger wave (w)-(x)-(y) channel and see price off to 1230 or above. If the current 1208-1193 dip turns out impulsive, a break below 1180 would confirm further decline to 1160.
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