Trading exited the main ascending channel to correct the entire upside wave which started from 745.00 to the top at 1752.50, this downside correction is finding difficulty in breaching 23.6%. As seen above, trading is restricted within a sideways range among 1485.00 and 1602.00 which will define the short term direction for the metal.
Breaching the support at 1485.00 expands the downside correction towards 1370.00 -38.2% correction- while breaching 1602.00 resistance takes the metal to retest the previously breached support which turns into resistance now around 1695.00. Stochastic is entering overbought areas, while the 100 MA is the ceiling for short term trading adding more downside pressure on the metal increasing the likelihood for breaching the support targeting the next correction level above. In general, we recommend observing trading closely which might define the short term trend for the pair.
By: Yasir Mubarak
Senior Technical Analyst