SPOT GOLD – correction seen as positioning for FOMC event

Spot Gold entered corrective mode on Monday after last week’s steep fall showed signs of stall, as Friday’s trading ended in Doji candle after hitting 4 ½ month low at $1244.
Doji reversal pattern is forming on daily chart, with deeply oversold slow stochastic on daily chart suggesting further corrective action.
However, limited upside is seen as overall structure remains firmly bearish, with converging 10/200SMA on track to form death-cross and increase downside pressure.
Key event this week, FOMC policy meeting is in focus, with wide expectations of rate hike at Fed’s last meeting this year, as Friday’s solid jobs data reinforced expectations.
Initial resistance lies at $1252 (Friday’s high), ahead of $1256 (Fibo 23.6% of $1299/$1243 downleg), with key barriers at $1265/67 (Fibo 38.2% / 200SMA) expected to cap before larger bears resume.
Continuation of downtrend from $1357 (2017 high posted on 08 Sep) would focus immediate target at $1240 (50% retracement of larger $1122 / $1357 ascend (Dec 2016 / Sep 2017) and could extend towards $1212 (Fibo 61.8%) and $1204 (10 July trough).

Res: 1252; 1256; 1260; 1265
Sup: 1246; 1244; 1240; 1235