The inability of the yellow metal to surpass the 200-hour SMA on Tuesday morning was followed by a significant 1.85% plunge down to the 1,290.00 level. Additional bearish pressure was provided by disappointing US Retail Sales released mid-yesterday.
During this time, Gold breached various support levels, including the five-month channel. The seniority of this pattern suggests that the pair should edge higher and test its bottom boundary and the 50.0% Fibonacci retracement at 1,300.00.
It is also likely that the pair’s appreciation does not end there, as it should aim for the 55-, 100– and 200-hour SMAs near 1,310.00.