18/01/2024
Gold Daily Timeframe Technical Analysis:
The peak formation on October 28th at 2088.47 US dollars per troy ounce signaled a warning alert for XAUUSD traders on the impeding weakness of the bulls to pull prices higher and eventually exceed the previous peak at 2074.35 to resume the upward trajectory.
However, with the recent price action, the bears indicated a strength in maintaining control of the market and pushing the prices lower, which may pave the way for a technical reversal to the downside if it persists.
More particularly, the most recent peak formation at 2062.28 failed to exceed the previous peak at 2088.47, signaling a cautionary warning to the traders for a technical reversal to the downside.
Subsequently, prices fell below the key support level of 2013.34, forming a technical reversal to the downside known as a failure swing and hence
confirming the downward bias.
Both the 50-period Moving Average and the Momentum Oscillator are in agreement with the bearish outlook. In particular, prices are trading below the Moving Average line, indicating a downward bias where the Momentum Oscillator fell below its 100 baseline, supporting the bearish scenario.
In this bearish scenario, four potential price targets may be calculated:
1993.76: The first price target is seen at 1993.76.
1983.10: The second target is calculated at the 1.618 Fibonacci extension of the failure swing formed at the peak of 2062.28 and the trough at 2013.34.
1973.06: The next target in line is seen at the key support level of 1973.06, corresponding to the previous trough.
1934.16: Finally, the fourth price target corresponds to the 2.618 Fibonacci extension of the recent failure swing.
Conversely, in the alternative scenario where the bulls seize the opportunity and enter the market with buy orders, pulling prices to surpass the peak of 2062.28, it will invalidate the downward scenario.
