Gold is on track for the biggest weekly drop in 15 months
Bears are taking a breather on Friday after strong bearish acceleration in past two days started to run out of steam and found a footstep at key Fibo support at $1768 (61.8% of $1677/$1916 rally) and just above the base of rising and thickening daily cloud ($1761), as well as the base of thick weekly cloud ($1763).
The yellow metal came under strong pressure on hawkish Fed that strongly boosted dollar and fell to the lowest since early May.
Gold fell over 4.5% on Wed/Thu after Fed announced intentions to start changing its ultra-loose monetary policy and is on track for the biggest weekly drop since early March 2020.
Fresh weakness broke through a number of technical supports, generating strong bearish signals, with firm break of the last strong obstacle at $1768, to confirm strong bearish stance.
Massive weekly bearish candle is expected to weigh heavily on near-term action and risk test of Fibo target at $1734 (76.4%) and psychological $1700 level.
Today’s recovery attempts were limited, with long upper shadow of daily candle pointing to strong upside rejection and maintaining firm bearish bias
Extended consolidation (ideally to be capped under $1800 zone) is expected to precede fresh push lower, however, oversold stochastic and momentum turning sideways deeply in the negative territory, warn of stronger bounce.
Extended upticks should stall under broken 200DMA ($1838) to keep bears in play and offer better opportunities to re-enter downtrend.
Res: 1796; 1802; 1824; 1838
Sup: 1768; 1761; 1734; 1723