FxWirePro: Exhausted bullion bulls at 38.2% Fibos make access steep slumps, more dips seem likely on both momentum and trend confirmation

The flurry of bearish streaks in Gold prices was traced out just a fortnight ago that has evidenced considerable price slumps, while the consolidation phase in the major trend also seems to have been exhausted at around 38.2% Fibonacci retracement levels.

Historically, hanging man and shooting star pattern candles have occurred at 1321.49 and 1308.76 levels respectively, that is where the stiff resistance at the same level was observed (refer monthly chart to see the strong supply zone). In July and September 2016, you could observe the similar resistance levels at this juncture. And for now, in September 2017, we’ve seen steep slumps after peaking to the same level.

You could expect more bearish streaks going forward as 7DMA most likely to cross below 21DMA which is a bearish DMA crossover.

While both leading oscillators (RSI & Stochastic curves) evidence downward convergence to the prevailing price dips. This signals the strength and intensified momentum in selling interests.

To substantiate this bearish stance, MACD, on the other hand, also shows bearish crossover to indicate the downswings to prolong further.

Never get puzzled by major trend – The major trend seems to be exhausted before retracing 38.2% Fibonacci levels from the lows of 1046.54. Historically, the prices in this consolidation phase are plummeted at the same level by popping up shooting star candle pattern (refer monthly chart).

Consequently, you could very well observe its bearish effects as both momentum and trend indicators on this time frame don’t give a better clarity for further continuity of consolidation phase. Overall, we reiterate that the prices have rejected the stiff resistance zone of 1357 – 1382 levels several times in past, it has again shown the weakness at that level.

To participate and speculate this bearish streaks, we advocate tunnel spreads using upper strikes at 1292 and lower strikes at 1285, prefer narrowed tenors in order to have the time decay advantage.

Currency Strength Index: FxWirePro's hourly USD spot index is flashing 42 (which is bullish) while articulating at 09:23 GMT. For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex.

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