FxWirePro: Gold bearish trend imminent on double top coupled with shootings stars, hammer counters but technical indicators yet to confirm

Despite an eventful trading sessions in the recent past (almost about 1.19% spike), gold price in the major downtrend, has been struggling to consolidate.

Technically, on intraday plotting, Gold (XAUUSD price), has formed “hammer patterns” at $1,221.17 and $1,221.29 levels (refer 2H chart). Consequently, bulls, have attempted to spike above SMAs, on the contrary, but technical indicators are in no conformity to these interim rallies. RSI and stochastic curves, on this timeframe, still converge downwards, while MACD is also bearish bias.

Mild bullish swings of this month, are not backed by both trend & momentum indicators (refer monthly chart).

The major downtrend resume after the failure swings at the stiff resistance levels of $1,368.20 levels. While the double top pattern has formed with top 1 at $1,375.04 and top 2 at $1,365.95 levels (refer monthly plotting). As a result, the current price on this timeframe, has slid below EMAs with bearish crossover. Amid this bearish journey, bulls seem to have been exhausted again at 7EMA levels, the major downtrend is foreseen to prolong further upon bearish EMA & MACD crossovers (refer monthly chart). 

Hence, on trading grounds, one can buy 1m at the money 0.51 delta call options and on hedging grounds, we advocate initiating shorts in CME gold contracts for Dec’18 delivery at spot reference of $1,223.81/oz.

Currency Strength Index: FxWirePro's hourly USD spot index is inching towards -21 levels (which is bearish), while articulating at 12:52 GMT. For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex