Today $XAUUSD formed Bearish Engulfing on daily. The odds shifted to the dark side. Expect a sizeable decline. The last times it happened with the similar technical conditions -August 7, November 9, and January 6. You can check what happened right after these days – I pointed them on the chart above.
Bearish Engulfing is considered the strongest of all bearish combos. The daily RSI, that supports the candle, is grossly overbought and needs to correct. It remains to be seen how far.
If the price follows the bearish sign and closes the weekly candle below 1873, it would make a Bearish Engulfing on the weekly frame and the direction would shift to down for multiple weeks, possibly months. This weekly candle would be critical for the mid term path.
If the worst materializes on the weekly, I would expect $XAUUSD to decline to min 1730, possibly even to 1420. The wave could be very brisk (rarer case) or could hit the bottom around mid December. Let’s see how it starts.
I hope I am deeply mistaken.
Below is the long term forecast that I shared on August 15, 2020. It was originally met with a lot of skepticism, however, it has been guiding me well so far. I am sharing two images – the original one and the refreshed today (all original elements intact).
Long Term Forecast: August 15, 2020 and Now
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