Gold's Bearish Pattern Signals Further Declines
11 June 2024
In today's technical analysis, let's delve into Gold, which has formed a significant head and shoulders pattern, marked in yellow. On Friday, the price broke the neckline, highlighted in green. After this break, a typical market behavior followed—a bullish correction aimed at retesting the broken neckline as resistance. Although the test wasn't entirely complete, another attempt might occur today or tomorrow.
As long as Gold remains below the green neckline, the sentiment is bearish. The initial target is the 23.6 Fibonacci level, but a more probable target lies at the 38.2 Fibonacci level, which coincides with the high from early December 2023. This indicates that the downside pressure is strong and likely to continue.
However, if the price reverses and breaks back above the green neckline, it would invalidate the head and shoulders pattern and signal a potential buy opportunity. This reversal would suggest that the bearish momentum has subsided, paving the way for a bullish phase.