Gold is currently showing signs of rejection after testing the upper boundary of a rising channel where strong selling pressure appeared, forming a sharp bearish reaction. This suggests that buyers are losing momentum at higher levels and smart money may be distributing positions.
Tecnically reason behind this movement is not just technical it also connects with the behaviour of the US Dollar Index (DXY). When the dollar strengthens, gold typically moves down due to their inverse relationship a short-term recovery or strength in the dollar could be pressuring gold lower right now. Additionally, traders may be reacting to profit-taking after the recent bullish move, combined with cautious sentiment ahead of upcoming economic data such as inflation reports or interest rate expectations.
Resistance ; 4860 / 4889
Support ; 4772 / 4700
But Price still remains overall bullish in the short term, but this recent rejection indicates a potential corrective move. Price is now likely targeting lower liquidity areas , with the first key support around 4,770. If this level fails to hold, the next downside target sits near 4,700, aligning with the lower boundary of the channel and a previous demand zone.
You may find more details in the chart,
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