Technical outlook:
Gold has finally printed fresh highs at $1,703 levels, just a few points above $1,692 from the last week. It seems that the yellow metal has formed a meaningful top and should be looking to reverse lower in a major trend reversal. Also please note that it has broken the immediate support at $1,643 last night and registered fresh intraday lows around the $1,642 levels, before pulling back higher again. The rally during the day was a retracement towards the fibonacci 0.50 of the earlier drop. The odds are still high that Gold might rally towards $1,680 levels before reversing lower again. The $1,680 is also 61.8% retracement of the earlier drop between $1,703 and $1,642 respectively and hence there is high probability for a bearish move. From the trading point of view, the yellow metal is good to sell on rallies with risk at $1,703 and a potential downside initial target at $1,560. A break below $1,560 would confirm that the trend has reversed and bears would be poised to print lower lows and lower highs going forward.
Trading plan:
Remain short @ 1,658/60 and add more @ 1,680, top above 1,703 and target is below 1,560.
Good luck!
