Gold on a higher time frame is moving inside a Pennant formation and is close to the apex . The next major move in Gold will be a breakout of the pennant pattern and the expectation is to break out to the upside. However, this could take many weeks of sideways movement before we see a breakout.
Seasonally Gold is bearish from November until mid-December when we typically see a change in direction. Therefore we could see Gold move sideways collecting liquidity below.
Friday's drop was expected as it was the end of the month and often traders cash in on profits. Price has dropped below the ascending channel of the D1 chart however it's still above the 50EMA.
In the coming week, we need to observe what happens when the price reaches 1792 and above. If we get a Daily candle close above 1800 we are likely to reach for our target on the upside at 1838.
If we find resistance at 1792 and we see a candle body close below 50EMA we are likely to drop lower and possibly even to 1707 in the coming weeks.
We have FOMC I=on Wednesday and we could just see sideways movement until then.
Due to seasonality we are bearish on gold and will look for short positions around 1792.
