GOLD Weekly Analysis:
It has been trading in range for 980 days = 980 /365= 2.68 years approx
Previously trend has been in upward momentum and then it went into consolidation(sideways) or can be considered accumulation as it is bullish rectangle.
Ranges are good to trade as markets are in equilibrium and can brake either side but here the probability is high towards upside due to bullish rectangle
Also from point A to B there was double bottom with the divergence on RSI but the bottom didnt break and RSI leads the price back to the range top to point C to $2078.
From point C to D a wedge formation within the range and bullish divergence on RSI = reversal movement and moves the price from low of $1700 to $2040.
Point is RSI has been effective in gauging the strength of direction.
Now if the rectangle breaks then the next target from range brake will be 2500
Based on FIB projection first target will be (2300-2040=260)
% Return = 260/2040= 12.74%
Second target will be (2500-2040=460)
% Return = 460/2040 = 22.54%
By the time there is no divergence on RSI and price brakes the last 2 highs 2078 and we have some green candles visible to support the direction as well, longs can be initiated above 2080 to chase 2500 level.
Remember this is weekly timeframe will take atleast a year to perform and the most important is SL:1640
It has been trading in range for 980 days = 980 /365= 2.68 years approx
Previously trend has been in upward momentum and then it went into consolidation(sideways) or can be considered accumulation as it is bullish rectangle.
Ranges are good to trade as markets are in equilibrium and can brake either side but here the probability is high towards upside due to bullish rectangle
Also from point A to B there was double bottom with the divergence on RSI but the bottom didnt break and RSI leads the price back to the range top to point C to $2078.
From point C to D a wedge formation within the range and bullish divergence on RSI = reversal movement and moves the price from low of $1700 to $2040.
Point is RSI has been effective in gauging the strength of direction.
Now if the rectangle breaks then the next target from range brake will be 2500
Based on FIB projection first target will be (2300-2040=260)
% Return = 260/2040= 12.74%
Second target will be (2500-2040=460)
% Return = 460/2040 = 22.54%
By the time there is no divergence on RSI and price brakes the last 2 highs 2078 and we have some green candles visible to support the direction as well, longs can be initiated above 2080 to chase 2500 level.
Remember this is weekly timeframe will take atleast a year to perform and the most important is SL:1640