Gold is trading below the 200 EMA and below the 3/8 Murray under downward pressure. The metal is likely to continue its decline to support of 2/8 Murray at 1,781 and 1,770.
The psychological level of 1,800 also acts as a mental barrier for the bulls. Besides, the market fear about the Omicron variant keeps investors away from taking positions above 1,800.
According to the 4-hour chart, we can see that gold is under selling pressure. A pullback is expected towards 1,794. Ifthe price fails to consolidate above this level, it will be an opportunity to sell with targets at the weekly support of 1,771.
The eagle indicator is approaching an overbought zone again. It is likely to give the signal of exhaustion in the next few hours, which could favor a decline in gold in the next few days.
You can see in the chart the formation of the bullish pennant pattern. This technical pattern has a profit potential of the size of the flagpole. A break to trigger the signal for this bullish pennant will only be confirmed if gold consolidates above 1,797 with targets at 1,812 and 1,828 (5/8).
On the contrary, this technical pattern would be invalidated, if gold trades below the 200 EMA which would be a continuation of the technical correction and the price could reach the initial momentum around 1,750.
Our trading plan for the next few hours is to sell below 1,790 with targets at 1,781 and 1,770. The eagle indicator supports our bearish outlook.
Support and Resistance Levels for December 22 - 23, 2021
Resistance (3) 1,812
Resistance (2) 1,806
Resistance (1) 1,797
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Support (1) 1,788
Support (2) 1,781
Support (3) 1,767
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A trading tip for GOLD on December 22 - 23, 2021
Buy in case of a breaks above 1,796 (21 SMA - 200 EMA) with take profit at 1,812 (4/8) and 1,828 (5/8), stop loss below 1,789.