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Gold prices experienced a notable rebound, finding support amidst a decline in the US dollar following the release of negative economic data. The precious metal reached its peak at $2,334 per ounce.
In terms of technical analysis today, upon examining the 4-hour timeframe chart, it’s evident that the simple moving averages are exerting downward pressure on the price from above. Additionally, negative signals have emerged on the Stochastic indicator, indicating potential for a continuation of the downward correction.
Considering the stability of daily trading below the previously breached support level of 2325, which now acts as resistance following the principle of role reversal, the likelihood of resuming the downward corrective trend is high. The next targeted levels are 2300 and 2260.
It’s important to note that a breakthrough and subsequent stability in trading above the 2325 level, confirmed by at least an hour candle closure, could mitigate the downward pressure on gold prices. In such a scenario, we might see a potential retest of the 2365/2360 levels.
Warning: Given ongoing geopolitical tensions, there remains a high level of risk, which could result in significant price fluctuations.
Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart
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