Technical outlook:
Gold prices chose to rally straight from $1,940 low registered early this week. We had projected an intraday drop to $1,930 before the rally could resume, but the yellow metal has taken the alternative trajectory to print higher high around $1,980 now. There is still enough room left on the north side through $1,990 and $2,000 mark before bears are back in control.
Gold had earlier dropped from $2,070 through $1,890 levels carving a meaningful downswing as seen on the 4H chart. It is retracing the same from $1,890 lows and is expected to reach up to $,2000 mark in the next few trading sessions. Also note that $2,000 is close to fibonacci 0.618 retracement of the above downswing.
Hence probability remains high for a bearish reversal if prices manage to reach there. Furthermore, also note that there is a Fibonacci convergence seen around $2,030 mark, and prices could push through higher before finding strong resistance. Either way, Gold remains a strong candidate to be sold on rallies.
Trading plan:
Potential rally through $1,990-2,000 against $1,900. Then lower.
Good luck!
