Gold price is back in the red zone. As FXStreet’s Dhwani Mehta notes, XAU/USD awaits bear pennant confirmation for a fresh downswing.

There is more room to the downside

“The non-interest-bearing yellow metal appears vulnerable with more tightening coming in from Switzerland and the UK in the session ahead. Meanwhile, should the tensions between Russia and the West intensify, the dollar could see the additional upside, as a flight to safety may remain at full steam. Therefore, XAU/USD appears in a lose-lose situation in the near term.”

“Gold price briefly breached the rising trendline support at $1,664 on Wednesday but averted confirmation of a bear pennant by closing at the day around $1,674. Daily closing below the support is needed to validate the bearish continuation pattern. The $1,650 psychological level will be the immediate line of defense, below which buyers will yearn for a sustained move towards the next support at around $1,643.”

“On the flip side, any recovery attempts will need acceptance above the recent range highs near $1,680. The next upside barrier is aligned at around $1,700. Daily closing above the latter is critical to unleashing the further recovery towards the bearish 21-Daily Moving Average (DMA) at $1,704.”

See – BoE Preview: Forecasts from 10 major banks, a close call between 50 bps and 75 bps