Has Gold (XAUUUSD) Topped out? Gold Price May FallOn Friday, 5 May 2023, Gold price got rejected from the All-time high levels of 2050-2070.
The drop resulted in formation of a DAILY BEARISH ENGULFING CANDLESTICK PATTERN as well as an EVENING STAR CANDLESTICK PATTERN at the ATH resistance levels, which shows sellers are active at this level.
Checking out previous price action, the GOLD Price is trading in a rising channel making HIGHER HIGHS & HIGHER LOWS which signifies the uptrend.
However, checking the RSI indicator which shows the momentum in the uptrend, RSI is making LOWER HIGHS. This results in BEARISH DIVERGENCE!
A Bearish Divergence is a sign of loss of strength in uptrend which means bulls are getting weak and may signal profit booking & trend reversal.
But this does not means to get Bearish on GOLD as of now. We need further confirmations for that.
If Daily candle closes below the rising channel as well as 1968, price may drop till 1940.
Area between 1915-1940 is the must hold level for BULLS. If price closes below 1915 we can then expect beginning of downtrend in GOLD
BUT, since price is still in uptrend and we must follow the trend untill it ends. If daily closes above 1970, price may continue to go high.
CONCLUSION
1. Price is still in uptrend.
2. If daily closes below 1968, price may drop till 1940
3. Area between 1915-1940 is a must hold levels for bullis. If price closes below 1915, a new downtrend may begin.
Let me know in the comments section if you want me to analyse any other financial instrument.
WARNING:-
ALWAYS FOLLOW RISK MANAGEMENT AND POSITION SIZING WHILE TAKING ANY TRADE.
