Gold posted two consecutive bullish doji candles, suggesting than an upside retracement may be on cards in the next few sessions. The commodity has continued to develop within a downward sloping channel since March 8 and the technical indicators are holding within their oversold levels. The RSI is flattening below the 30 level, while the MACD is strengthening its bearish momentum below its trigger and zero lines.
Another step lower may reach a key support zone at 1,721-1,731, where the price stopped in September 2021. Should this prove a weak obstacle, the selling could pick up speed until the 1,680 bottom, taken from the trough in August 2021.
Alternatively, in case of a rebound, immediate resistance could come from 1,762 before the focus shifts to the 1,785 inside swing low of the latest bottoms. Higher, the 20-day simple moving average (SMA), which overlaps with the 1,805 resistance could also restrict upside movements, though only a close above the 200-day SMA at 1,846 would confirm a bullish correction.
In the medium-term picture the pair is still increasingly bearish as long as it holds well below the 1,800 round number and more importantly within the descending channel.
