Gold suffered the worst week of 2019 as it crashed nearly $60 from the highs making a new low slicing through the supports with an unprecedented ease. The closing is also below the previous low which doesnt sound good for the bulls with such negative price action attributed to mainly lowering of trade tensions and a further push towards riskier asset class due to optimism over fading recessionary signals. But all is not over for bulls as tensions havent cleared out and a possible technical bounce can be expected if the low holds which can then be seen as a double bottom catalyst. To watch this week – Speech by President Trump and Powell’s testimony and other important data.
On the chart –
Gold had a big red bar which broke all the supports again pausing the bullish trend but it did find support near the previous low which can also be seen as a potential support area of the red diagonal trendline from where a bounce should be possible keeping the bulls in the fray. Fundamentals and technicals are providing mixed signals but the upper hand remains with the bulls given the uncertain politics which should keep the demand coming. We have 2 scenarios –
1. Gold probably made a double bottom, till the low is held it can rise to $1464. If this is taken out it can move towards $1480. And if this is crossed it can rally till $1495 and $1510.
2. Gold to continue heading lower it needs to break the low and if its successful it can head towards $1448. If this is taken out it can fall to $1434. And if this fails to hold it can slide towards $1420.
Bullish view – Bulls were thrashed out as the price fell the highest in a week in 2019 propping up fears again for a possible test the breakout zone. But bulls did had something in their favor as the price may have formed a double bottom which is a sign of reversal. For bulls to remain in the game they need to defend the low which if held can lead to a relief rally atleast if not a reversal.
Bearish view – Bears had the best week of 2019 as they eroded nearly $60 on account of lowering of tensions and a possible u-turn of recession fears. Bears remain in a strengthened position as have they closing in their favor but to continue the assault they need to break the low as well as the red diagonal trendline which should lead to retest of the breakout area soon.
On larger terms, Gold has turned sideways and prices are expected to be rangebound until a direction is confirmed.
Possible trades are on both sides but mainly on upside, gold can be bought above $1464 for the targets of $1480 and $1495 with a stop loss placed below $1454. Longer term target $1510.
Dips towards support (and breakout region) can be used to create longs for the above mentioned targets.
Shorts can be useful for scalp trades only until the direction is decided.
On the chart –
Gold had a big red bar which broke all the supports again pausing the bullish trend but it did find support near the previous low which can also be seen as a potential support area of the red diagonal trendline from where a bounce should be possible keeping the bulls in the fray. Fundamentals and technicals are providing mixed signals but the upper hand remains with the bulls given the uncertain politics which should keep the demand coming. We have 2 scenarios –
1. Gold probably made a double bottom, till the low is held it can rise to $1464. If this is taken out it can move towards $1480. And if this is crossed it can rally till $1495 and $1510.
2. Gold to continue heading lower it needs to break the low and if its successful it can head towards $1448. If this is taken out it can fall to $1434. And if this fails to hold it can slide towards $1420.
Bullish view – Bulls were thrashed out as the price fell the highest in a week in 2019 propping up fears again for a possible test the breakout zone. But bulls did had something in their favor as the price may have formed a double bottom which is a sign of reversal. For bulls to remain in the game they need to defend the low which if held can lead to a relief rally atleast if not a reversal.
Bearish view – Bears had the best week of 2019 as they eroded nearly $60 on account of lowering of tensions and a possible u-turn of recession fears. Bears remain in a strengthened position as have they closing in their favor but to continue the assault they need to break the low as well as the red diagonal trendline which should lead to retest of the breakout area soon.
On larger terms, Gold has turned sideways and prices are expected to be rangebound until a direction is confirmed.
Possible trades are on both sides but mainly on upside, gold can be bought above $1464 for the targets of $1480 and $1495 with a stop loss placed below $1454. Longer term target $1510.
Dips towards support (and breakout region) can be used to create longs for the above mentioned targets.
Shorts can be useful for scalp trades only until the direction is decided.