Gold once again retreats from the area of very important resistance, which is $ 1,790 per ounce. This is the zone associated with the local low from early February and the 38.2 Fibonacci retracement of the entire downward move from the current year. Gold closed a slight divergence with the EURUSD pair and reacted clearly to the decline in TNOTE (increase in bond yields).
From a technical point of view, it is worth noting that the nearest support is located around the upward trendline or the lower limit of the overbalance structure. The second thing, of course, is the potential double top formation, which is forming as price pulled back from $ 1790 level. A break below the $1765 level would be a confirmation of the formation. In this case downard move could be extended to the support at $1,740 an ounce. However, as long as the price sits above $ 1,755 level, the outlook for gold remains bullish, especially if we take into consideration a large double-bottom formation from early March and April. Potential target for buyers is located around $ 1,833 an ounce.
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Looking at the H4 interval, one can see that a bearish engulfing pattern surfaced on the chart, which could push gold lower. Source: xStation5
