GOLD - BEARSIH STRUCTURE FORMING. WILL IT BREAK CHANNEL SUPPORT?Symbol - XAUUSD
Gold has recently tested lower levels of rising channel and is now engaging with trend support, creating volatility in the market. The strengthening of the U.S. dollar is exerting downward pressure on the precious metal. Gold appears to be entering a corrective phase, with the market gradually shifting from a bullish to a bearish outlook due to increasing demand for the dollar, driven in part by concerns over potential trade wars arising from U.S. policies under former President Trump's administration.
The issue of tariffs imposed by the U.S. remains unresolved. Meanwhile, traders are closely monitoring U.S. economic data, including durable goods orders and consumer confidence, as well as the Federal Reserve's upcoming meeting, with its outcome expected to be released on Wednesday.
From a technical perspective, after the breakdown of the bullish market structure, the price is currently testing the support of the established channel. It is unlikely that this support level will be breached on the first attempt, and the price may experience a corrective move towards 2745 or potentially the imbalance zone, such as the 2750-2760 range, before resuming its downward trajectory due to selling pressure.
Key resistance levels: 2745, 2751, 2760
Key support levels: 2735, 2718
If the price fails to breach the 2745 resistance level and retreats to 2735, this could signal a potential break of trend support. In that scenario, an impulsive move towards 2718 may materialize. However, if the 2745 resistance level is overcome, gold could test the 2750-2760 range before continuing its downward movement which is more likely.
