Despite surpassing the 200-hour SMA early on Monday, the yellow metal returned below this line several hours later to test the 55– and 100-hour SMAs located circa 1,318.00. The pair was subsequently moving along the former, thus trading in a narrow range between this line and the 200-hour SMA by Tuesday morning.
Given that technical indicators are strongly bearish, this sentiment is expected to prevail in the market and thus push the rate for a test of the 38.20% Fibo retracement at 1,316.70.
Meanwhile, it is still possible that the pair still tries to test the upper boundary of the prevailing three-week channel down. In case the 200-hour is breached, gains should be capped near the weekly PP at 1,320.00.