Gold price attempts a dead cat bounce towards $1,800 amid retreating yields. But in the view of FXStreet’s Dhwani Mehta, Thanksgiving Day is unlikely to offer respite to XAU/USD bulls amid a bear flag.
Gold confirmed a bear flag on the 4H chart, impending bear cross lurks
“Gold is attempting a tepid bounce amid a brief pullback in the greenback. The US currency lacks the follow-through upside bias, as investors switch onto the sidelines amid a Thanksgiving Day holiday in the US. Despite the rebound, the risks remain skewed to the downside as the Fed’s hawkishness will continue to underpin the sentiment around the dollar and yields.”
“Growing covid concerns in the European countries could keep the investors unnerved and scurrying for safety in the dollar at gold’s expense. Further, a sustained technical break below the $1,800 threshold continues to keep the sellers motivated.”
“XAU/USD confirmed a bear flag formation on the four-hour chart Wednesday after closing the candlestick below the rising trendline support, then at $1,790. With the bearish technical setup in play, all eyes remain on the pattern target measured at $1,707. Ahead of that, the November 4 low of $1,769 could come to the rescue of gold bulls. The $1,750 psychological level could be the next stop for the bears.”
“The rising trendline support now resistance at $1,794, offers an immediate upside barrier. Acceptance above the latter will enhance the recovery momentum towards the $1,800 level. Further up, powerful resistance around $1,807 will be a nut to crack for gold bulls. At that point, the 200 and 21-SMAs coincide.”