The triangle pattern in gold we had suggested favored a break to the topside has failed. The below chart on the 2-hour timeframe shows the breakdown point and follow-through lower. We had also suggested that should the pattern fail, bulls would put up a fight in the $1740 - 50 area, now highlighted below.
Sign of strength: The below daily chart shows that gold is almost already oversold on the stochastic RSI. Contrary to the downward trend, the price has not put in a lower low as stochastic RSI has turned down (NOTE: it hasn’t bottomed yet). It would also not be unusual for the price to oscillate at a Fibonacci level for support/resistance.
A zoomed-out view of the dollar on the weekly chart shows that although it has found support at the bottom of it’s all too familiar rising channel, a major negative divergence in the RSI continues to flash, with the 200-week moving average far below.
Thanks and have a great day,
