FxWirePro: Gold price fades away its shine after breaching below channel support, consolidation phase in major trend seems exhausted at 61.8% Fibos

The price behavior of spot gold has been in rising channel so far, but it has breached below channel support (refer daily chart). The bears have been active exactly at channel resistance and as a result, the shooting star candle pattern is traced out.

Ever since this bearish pattern has occurred at 1284.56 levels, the bears have managed to evidence considerable slumps, the breach below this level likely to drag more slumps upto $1196 levels in the days to come.

The current prices are well below DMAs amid mild upswings, more slumps likely upon breach below strong support at channel base.

On a broader perspective, bulls of bullion in consolidation phase seem to be exhausted on failure swings at 61.8% Fibonacci retracement levels, expect dips on shrinking buying momentum

Historically, shooting star pops up at this same resistance levels to signal weakness in this precious metal prices and you could very well figure out slumps thereafter.

In an intermediate uptrend, gold prices have almost retraced upto 61.8% from the lows of 1046.54 to the recent highs of 1295 levels in the consolidation phase, but for, this Fibonacci level has acted as a stiff resistance (refer monthly charts).

Momentum study: The selling momentum now seems to be intensifying on both timeframes; both leading and lagging oscillators are in conformity to the selling pressures.

RSI and stochastic curves are converging to the price drops to indicate the strong selling momentum.

While current prices on this timeframe have been sliding below DMAs on daily terms and EMAs on monthly terms, MACD on the other hand evidences indecisiveness being bearish trajectory and indicates prolonged downswings on daily terms.

Trading tips:

Any abrupt rallies, next strong immediate resistances are seen at 1232 and 1245 region, on southwards 1196 would be the most certain event.

Well, for an intraday speculation, we advocate buying boundary binaries, boundary barriers with upper strikes at 1235 and lower strikes at 1217.

The trading between these strikes likely to derive certain yields in this puzzling trend and more importantly these yields are exponential from spot movements.

For cash or nothing, these options would be exercised if the forward prices to remain between both strikes (i.e. 1235 > Fwd price > 1217).