Welcome to the Extreme Investor Network blog! Today, we will be discussing the current resistance levels seen in the stock market and the potential risk of a breakdown from a consolidation top.
The recent price action in gold has shown resistance at the 20-Day Moving Average (MA), indicating a potential trend reversal. The crossing of the 20-Day MA below the 50-Day MA three weeks ago has signaled a weakening trend, with both moving averages angled downwards. The key price level to watch is the May 3 swing high at 2,277, as a decline below this level could confirm a reversal of the bull trend.
There is a risk of a breakdown from the consolidation top, with the 61.8% Fibonacci retracement at 2,262 potentially offering some support. However, a drop below 2,277 could lead to further downside momentum towards the next target zone around the prior swing high of 2,212.
Despite the bearish indications, a weekly bullish signal could be triggered above 2,340. A rally above this level would show strength and put gold back above the 50-Day MA, potentially leading to a weekly bullish reversal. The key resistance zone to watch is at 2,369, representing the next potential weekly resistance level.
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