Gold has come under renewed selling pressure over the last couple of 4-hour sessions, dropping below the 20- and 40-simple moving averages (SMAs) with strong momentum. Also, the price slipped below the Kijun sen and Tekan sen lines, supporting the bearish view, while the RSI indicator plunged into the negative zone. On the other hand, the MACD oscillator is flattening near the zero line.
In case of further declines the price could challenge the 1302.50 support, taken from the low on February 7 before retesting the 23.6% Fibonacci retracement level of the upleg from 1211 to 1326, around 1300. Marginally below this strong line, the 1297.50 support could act as significant obstacle for the bears.
To the upside, if the price climbs above the Ichimoku cloud and the SMAs, it could hit the 1315.50 resistance. A bullish action even higher could drive yellow metal towards the 1323.50 resistance, identified by the peak on February 1.
Overall, gold prices reversed back to the downside following the bounce off the eight-month high of 1326 at the end of January, maintaining a bearish correction mode.
