Gold - Is it making head and shoulder formation?

10 Jun 2016

Resistance- $1272, $1284, $1300

Support - $1260, $1253, $1247

Hourly chart pattern - Rising trend line at risk of being breached, bearish price RSI divergence

Daily chart pattern - Possible head and shoulder formation

• Gold's bearish price rsi divergence on the hourly chart if followed by a hourly closing below rising trend line would indicate increased risk of a drop to $1153 levels.
  

• A day end closing back below falling trend line (black) seen on the daily chart would increase risk of the XAU/USD forming head and shoulder pattern with neckline around $1195 levels.
  

• On the higher side, an hourly closing above $1172 would expose hurdle at $1284. Only day end closing above $1284 reduce the probability of prices forming head and shoulder.