Gold’s three-day appreciation against the US Dollar was stopped by the 200-hour SMA and the 38.20% Fibonacci retracement on Monday. As a result, the pair failed to form a higher high and reach the upper boundary of a short-term channel near 1,322.00.
Its movement yesterday was stranded in between two moving averages. The narrowing of the trading range does suggest that a breakout should occur soon, and it is likely that the direction of this move dominates the yellow metal during the remaining session.
Technical indicators favour a bearish breakout that should send the rate towards the senior channel and the 50.0% Fibo at 1,300.00. In case a bullish scenario occurs, Gold is expected to test the weekly PP at 1,331.00 within the following two trading sessions.
