FxWirePro: Gold displays bearish RSI divergence, bears lingering to breach 7-DMA, consolidation phase intact but railroad pattern signals weakness

Ever since a resembling shooting star pattern has occurred at 1322.57 levels, the momentum in the previous rallies seems to be exhausted.

As a result, both leading oscillators signal overbought pressures. You can easily make out that RSI evidences bearish divergence on daily terms, while fast stochastic curves pop up with the %d crossover that indicates the intensified selling momentum.

The decisive breach and sustenance below strong support at 7DMA would likely cause more slumps, bearish pressures confirmed by both leading oscillators & lagging indicator (MACD).

On a broader perspective, after 2-years of consolidation phase in the major trend, the bullish sentiment now seems exhausted again after railroad pattern at 1279.72 levels, upon non-sustenance above EMAs, consequently, the major downtrend now goes non-directional.

As and when bulls in this phase attempt to bounce back, upswings have been restrained below 38.2% Fibonacci levels every time.

Trend indicators on this timeframe are not in conformity to the bullish interests.

Trade tips: We advocate tunnel spreads using upper strikes at $1322.50 and lower strikes at 1314 levels, as we have the US nonfarm payrolls on the data front, this has been vital for the precious metal and a reading of 190,000 new jobs added in December expected today.