On January 6, I noted how the price action technicals were beginning to favor gold (here). Since, gold has begun to rally with force on both a global growth slowdown and increasing market turmoil. Naysayers will continue to hate gold, but both fundamentals and technicals remain supportive.
The surprising (maybe not so much) move by the Swiss National Bank to abandon the EURCHF floor, in order to front-run the ECB’s QE announcement, sent shock waves through the financial system. It took only two months to axe the floor, following the gold referendum, after the SNB was so passionate about doing “whatever it takes” to defend the floor. Price action surged above the 200-day EMA, which was pointed out as a secondary resistance level after overtaking the $1,240 key resistance level. Psychological resistance will be placed around $1,260, while price action has a chance to challenge the overwhelming downward trend created in March 2014.
Gold could find this challenging, as the focal ascending channel intersects the downward trend line at $1,272. It also corresponds with price action resistance. If price action is rejected, look for profit taking to take gold down to the 200-day EMA, perhaps the $1,240 level to test support. RSI is leading into an overbought condition, so this level could find consolidation before the next leg up.
However, if gold can over take it, I look for $1,295 to be the next key level of resistance, while $1,300 will act as a whole-number, psychological resistance traders seem to like. Above that, $1,314 per toz. is favorable.
We have now had several bars of strong, bullish volume above the 20-day average, and the ADX momentum indicator is ticking upwards – supporting the current uptrend.
eh... feel like taking my profit now, can i ride the trend to 1240?
Short was triggered at 1302... yesterday
tradingview.com/v/0fsypylM/
CommoditiesTrader
⋅
It is a great short-term idea!
jangseohee
⋅
Yes, it is :-)
CommoditiesTrader
⋅
What are you targeting? 1290 @ 1302 would be nice. I wonder if the ECB qe is priced in. I'd figure euro increase, dollar down...gold in dollars up?
jangseohee
⋅
1st target: 1260 the descending blue line support
further down 1240 and then boom another stronger bulls
it might not even go there but i am willing to take the risk at least 1260... worst case, i re-queue my stop loss from 1312 to 1302 :-)
CommoditiesTrader
⋅
That is probable. Shite, if you get 15-20 pts, move the SL at 5 + spread. Never accept breakeven on a winning trade ;)
jangseohee
⋅
ok.. right away SIR..
1295!
CommoditiesTrader
⋅
Hahah there you go. Just my way of thinking, I guess. I have had, and seen, trades waaaay in the money either hit breakeven or SL for a loss. I just figure, hell might as well get a little something :D
jangseohee
⋅
it is a trade off.. and i am suppose to trust my analysis that it will get to at least 1260.. but you never know :-)
Short was triggered at 1302... yesterday
tradingview.com/v/0fsypylM/