Nonetheless, a counter trend rally within the larger downtrend structure would be appropriate, and a test of the 50-day moving average could be what results in a new lower swing high.
Keep in mind that the 50-day moving average is anticipated to be below the recent lower swing high at $4,382 if it is reached.
Support Zone Defines Downside RiskA failure to reclaim the 20-day moving average looks likely to be followed by further testing of a support zone that lies from around $3,927 to $3,886.
Another possibility is that gold consolidates further below the uptrend line and at or slightly above the support zone.
If you’d like to know more about how to trade gold and silver, please visit our educational area.
Bearish Structure Still Dominates Medium-Term Trend
Let’s not forget that a continuation of the bearish breakdown from the 200-day moving average triggered in early June has remained in effect, and it was followed by a pullback and confirmation of resistance below the average along with a lower swing high. That is bearish behavior that supports further downside. Nonetheless, a counter trend rally within the larger downtrend structure would be appropriate, and a test of the 50-day moving average could be what results in a new lower swing high. Keep in mind that the 50-day moving average is anticipated to be below the recent lower swing high at $4,382 if it is reached.
Support Zone Defines Downside Risk
A failure to reclaim the 20-day moving average looks likely to be followed by further testing of a support zone that lies from around $3,927 to $3,886. It is supported by the midline of a wide descending trend channel, which has previously acted as support at prior lows. Another possibility is that gold consolidates further below the uptrend line and at or slightly above the support zone.
If you’d like to know more about how to trade gold and silver, please visit our educational area.
