Gold has been underperforming in the past three days, breaking back below the key level of 1312.50. When looking at the bigger picture the precious metal lacks a clear trend, while in the short-term, technical indicators support a bearish structure.
In the 4-hour chart, momentum indicators are pointing to a negative bias with the RSI indicator approaching the 30 level and the oversold zone. Moreover, stochastics are heading downwards to reach oversold levels, with the bearish cross between the %K the %D line suggesting a decline. The 20-simple moving average (SMA) has also posted a bearish crossover with the 40-SMA, following the negative bias of the price.
Further losses could see the March 1 low of 1303 acting as a major support level. A drop below the aforementioned level could reinforce the bearish movement in the short-term, opening the way towards the next key handle of 1300.
In the event of an upside reversal, a climb above the 1312.50 resistance level could open the door to the 23.6% Fibonacci retracement level of 1318 of the downleg from 1366 to 1303. A break above this level could lead the way towards the 38.2% Fibonacci mark of 1327.
