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Bearish Shooting Star on Horizon
Assuming the day ends with a shooting star pattern, then a drop below today’s low of $2,882 provides a bearish signal that could lead to lower prices. But the one-day potential shooting star reversal pattern is only one part of the analysis. The other part looks at the potential significance of the day’s high price. There were two indicators pointing to the $2,947 price zone as potential resistance.
Although there wasn’t an exact hit, it was close enough given the bearish reaction. Both a long-term and short-term measurement pointed to the target. One, is the 161.8% Fibonacci extension of the most recent bearish correction that began from the peak at $2,790. The other is an extended ABCD pattern that begins from the October 2023 lows. Further, notice that the relative strength index (RSI) momentum oscillator reached overbought, and it has matched the high reading seen in September 2024.
Top of Channel Remains an Upside Target
Even though there might be a pullback following today’s high, gold retains the potential to continue higher. Take the rising parallel trend channel with the lower rising trendline touching the February 2024 swing low and the top line touching the October 2024 swing high.
The top of the channel has not yet been hit. On the way there are a couple of other targets. The first is at $2,961 and the second at $2,982. Otherwise, a drop below today’s low shows weakness, followed by potential support at Monday’s low of $2,853. However, a decline below Monday’s low puts gold back below a trendline, which will signal lower prices.
For a look at all of today’s economic events, check out our economic calendar.
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