Gold is pressing against $4,150 support on its 5-hour chart, trading at $4,160.50 as a descending triangle pattern nears completion. A close below the level opens the door to a slide toward $3,963, while fading bearish momentum keeps a relief bounce in play.
Descending triangle nears its resolution
Gold's 5-hour chart shows price compressing just above $4,150, having just printed a bearish Marubozu candle near this area. The metal sits at $4,160.50, only a hair above that floor.
The descending triangle guiding the move is 80% complete, raising the odds of a forceful move soon as volume thins out. A decisive close below $4,150 could trigger a selloff toward $4,065 and potentially as far as $3,963, a previous major swing low and key Fibonacci extension. Overhead, bulls face a wall at $4,220 to $4,260, where moving averages and the cloud meet.
Oversold signals offer a cushion
Despite the bearish trend, a few signs point the other way. The MACD's bearish momentum is fading, and RSI near 42 is approaching oversold territory, a zone where relief rallies are often born. Price also remains above the $4,130 swing low, and a hold there could power a snapback rally.
Any bounce still has to clear resistance at $4,200 (SMA 20) before testing $4,260 and then $4,411 (SMA 200).
Levels traders are watching
On the bearish scenario, entries sit at $4,145 on a close below $4,150 or $4,130 on a retest, with a stop at $4,198 and targets at $4,065, $3,963 and $3,850. On the bullish scenario, entries sit at $4,160 on a bullish engulfing candle or $4,200 on a close above the SMA 20, with a stop at $4,106 and targets at $4,268, $4,350 and $4,411.
The $4,150 to $4,220 range is flagged as a no-trade zone of sideways chop and unreliable signals, with the clearer setup favoring a breakdown trade on rising volume if support gives way.
Source: Investing.com
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