GOLD has formed a bearish divergence with price approaching an area of strong confluence [D L3, +2/8] Bearish divergence happens when price makes a higher high while the oscillator makes a lower high.
POC zone is 1.2710-20 [D L3, +2/8] If we see a bearish rejection from this zone, first target will be 1.2680 [D L3, 7/8, W H3] and subsequently 1.2664 [D L4, 6/8], with extended bearish momentum targeting 1.2626 [D L5, 4/8, Weekly Opens].
Price is now rejecting from the Cluster Confluence Point, and we might see an engulfing candle with a Marubozu close, showing extreme bullish weakness and bearish strength. Our trigger is confirmed if the candle closes this way. Else, any form of bearish candlestick configurations like Hanging Man, Dark Cloys Cover, Shooting Star, Bearish Harami etc.
Divergence is invalid if price closes above 1.2742 [ATR H1, D H4, W H4, Previous Swing High]. In which case we might see a bullish move towards 1.2821 W H5.