Gold is heading south following the strong pullback on the 1361.40 resistance level on Friday. Having a look at the short-term timeframe the price almost hit the 23.6% Fibonacci retracement near the 1335 level of the last up-leg with the low of 1236 and the high of 1366. The bearish correction is confirmed by the MACD oscillator.
In the 4-hour chart, the MACD is falling near the zero line and below its trigger line, while the stochastic oscillator posted a bullish crossover in the oversold zone, suggesting weaker bearish movement and a possible bullish retracement.
If the precious metal drops below the 23.6% Fibonacci mark, it could hit the 1316.80 support level, which coincides with the 38.2% Fibonacci level. As a side note, the price is currently trading below the 20 and 40 simple moving averages in the short-term timeframe.
Conversely, upside moves are likely to find resistance around 1350, which overlaps with the 40-SMA at the time of writing. Moreover, a bullish rally could extend gains towards the 1361.40 resistance barrier.
