Gold has plummeted during today’s European session after the bounce off the 1325.75 resistance level. It is worth mentioning that the price has been trading within a trading range since January 25 with the 1365 resistance level being the upper boundary and the 1307 support level the lower boundary as it lacks a clear trend.
Technically, in the 4-hour chart, the RSI indicator is sloping to the downside and is approaching oversold levels, while the stochastic oscillator posted a bearish cross within the %K line and the %D line, signaling further downside pressure.
In the wake of negative pressures, and a drop below the lower Bollinger band, which overlaps with the 1315.15 support level, the market could meet 1307. A successful close below this level could see a break of the consolidation zone and drive the precious metal lower towards 1303.
However, if prices are able to break above the 20- and 40-simple moving averages in the short-term near 1321.30 and 1327.70 respectively in the next few sessions, the risk would shift to the upside, specifically towards the 1332.50 resistance level.
