Bear Flag Measuring Objective
When measuring the bear flag, a target slightly higher than the 50-Day line can be identified. By calculating the flagpole from the daily breakdown of the April 19 low of 2,373 to the recent retracement low of 2,291, a potential target of 2,238 is determined. Today’s clear selling activity, indicated by a wide range red candle with trading continuing near the range lows, increases the likelihood of meeting the flag target. It is important to note that selling typically does not occur in just one day, and there are parallels between today’s market activity and previous patterns on April 12 and 22.
Interim Target
Looking ahead, the next potential support zone falls around 2,261 to 2,255, encompassing two Fibonacci levels. Additionally, an internal uptrend line is in close proximity to this price zone, offering further insight as the market continues its downward trend. Despite the various support levels along the way, the lower internal uptrend line, given the large rising parallel trend channel in gold, could also be a target. Monitoring market indicators will provide valuable clues as the market progresses downward. Currently, the price zone around the 50-Day MA is expected to signify the deepest retracement.
Weekly Bearish Signal
Looking at last week’s low and the next support level at 2,291, a drop below this level will activate a bearish continuation on a weekly basis, further reinforcing the likelihood of lower prices. Gold has experienced a significant rally and long-term bullish breakout, with a sharp 22.5% increase in just 41 days. A deeper retracement is considered healthy for the market as it allows for the establishment of stronger support levels in preparation for the next rally.
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**Additional Insight:**
– It is crucial for traders and investors to carefully monitor technical indicators, support levels, and market patterns for clues about potential price movements. By understanding these factors and keeping a close eye on market developments, market participants can make more informed decisions regarding their trading strategies.
– The concept of retracement and consolidation in the market is a natural phenomenon where assets take a breather before potentially resuming their upward trend. This period allows for price discovery and the formation of new levels of support, which are essential for sustaining future market momentum.
