Technical Take on XAU/USD: $2,000 Whipsaw
Amid a rally in US Treasury yields and a broad-based USD bid, spot gold (XAU/USD) is getting hammered lower today!
Down -1.1%, the precious metal is now on the doorstep of shaking hands with the widely watched 2,000 level. While this psychological barrier will house buying interest, a whipsaw (or stop run) of this level could be on the table if challenged, potentially chalking up what is referred to as a Bear Trap. The rationale behind a possible whipsaw is what lies beneath $2,000. Between $1,971 and $1,986—made up of an AB=CD bullish pattern (100% projection ratio), horizontal support as well as a number of Fibonacci ratios—offers a technically confluent support zone that could attract buyers beneath $2,000 in search of entering long into sell-stop liquidity produced via the $2,000 breach.
Down -1.1%, the precious metal is now on the doorstep of shaking hands with the widely watched 2,000 level. While this psychological barrier will house buying interest, a whipsaw (or stop run) of this level could be on the table if challenged, potentially chalking up what is referred to as a Bear Trap. The rationale behind a possible whipsaw is what lies beneath $2,000. Between $1,971 and $1,986—made up of an AB=CD bullish pattern (100% projection ratio), horizontal support as well as a number of Fibonacci ratios—offers a technically confluent support zone that could attract buyers beneath $2,000 in search of entering long into sell-stop liquidity produced via the $2,000 breach.
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