Gold: XAU/USD under pressure, hits weekly lows but remains above $1910
Gold: XAU/USD is under pressure, hits weekly lows but remains above $1910 but has not touched the highs of the past few weeks. Gold has dropped sharply during the past week and we have been watching it for the last two days as the technical indicators indicate that it may enter the resistance levels which are now forming on the resistance levels that were formed last week when we saw USD and Gold in a bear market.
If the trend continues in the same way that it did last week then we can expect gold to make another major break and get back to the support levels we saw yesterday or this week. If it maintains the same pattern that was established last week, then we can expect it to start breaking resistance levels at this time. The support levels that are forming now, are those areas on the daily charts, which were created as the price of gold started to weaken back in May 2020.
In this chart you can see that prices of gold have been on a downward swing for the last couple of months, then they started to slowly recover and prices started to go up again. Since then the prices of gold has declined once again, which is what we expected from this price action pattern.
As you can see there is a lot of resistance on the daily charts, which is the result of a price-action pattern. The price action pattern was established by the technical indicators, as they are well aware of the resistance levels and the support levels that are forming at this time.
One way to understand what this price action pattern is about is to think of the market as being like a river where you can either go left or right depending on the current flow of water. The water flows both ways up and down the river and at times it moves against the current and at other times it flows in the same direction as the current.
Now you can see that the market is like this river and gold is like the current flowing on one side of the current and gold in this case is going the other way. Gold has been moving in the direction of resistance levels as it forms new support levels, which is causing the price of gold to turn lower before it turns higher.