Gold made a green candle after a pause of two weeks broadly on account of fears regarding a chaotic Brexit and unfavorable data spilling out of America suggesting continued anxiety over an imminent slowdown. The ECB further strengthened the case of the ongoing slowdown as it stuck with its negative interest rates for a prolonged period, this in turn should put increasing pressure on the U.S Fed for further easing its policies which is due for a meet on 30th, Wednesday. The news pressed move has pushed gold into breaking out of the channel which could result in re-establishment of bullish trend but all is not that rosy as weekly timeframe still doesn’t suggest a change in trend as the resistance of the black diagonal trendline remains firm allowing bearishness to still find superiority. To watch this week- U.S Fed interest rate decision and other important data.
On the chart-
Gold made a comeback on timeframes lower than weekly as the price movement suggests a breakout but the daily candle of Friday did showcased a reversal keeping the lid on bullishness. Fundamentally, news flow in the weekend keeps supporting lower prices, but everything will depend on the Fed which should play the catalyst for firming the ongoing trend. We have 2 scenarios –
1. Bulls made a return as they tried to offset bearishness by the recent upmove which may result in a confirmed breakout with targets of $1527 and $1541.
2. Gold closed below the support, till its defended it can move to $1495. If this is taken out it can slide to $1480. And if this is breached it can fall to $1464.
Bullish view – Bulls made a comeback as they pushed the prices higher resulting in a probable breakout but it can be an eye wash as well since they were not able to close above the resistance of the black diagonal trendline. For bulls to re-conquer the trend they need to take out major resistances as fundamentally they are not that well supported as they used to be.
Bearish view – Bears landed in an array of dismay as price action does indicate a probable breakout on upside but all is not lost as they quite smartly defended the big resistance of black diagonal trendline offering themselves another chance to push back the prices with fundamentals being on their side. For bears to keep the trend intact they need to protect the key resistances and aim for a lower low.
On larger terms, Gold remains bearish and prices are expected to head lower but this can change if breakout gets confirmed.
Possible trades are on both sides but mainly on downside, gold can be sold below $1495 for the targets of $1480 and $1464 with a stop loss placed above $1505. Longer term target $1448.
Dips towards support (and breakdown region) can be used to create shorts for the above mentioned targets.
Longs can be useful for scalp trades only until the breakout gets confirmed.
On the chart-
Gold made a comeback on timeframes lower than weekly as the price movement suggests a breakout but the daily candle of Friday did showcased a reversal keeping the lid on bullishness. Fundamentally, news flow in the weekend keeps supporting lower prices, but everything will depend on the Fed which should play the catalyst for firming the ongoing trend. We have 2 scenarios –
1. Bulls made a return as they tried to offset bearishness by the recent upmove which may result in a confirmed breakout with targets of $1527 and $1541.
2. Gold closed below the support, till its defended it can move to $1495. If this is taken out it can slide to $1480. And if this is breached it can fall to $1464.
Bullish view – Bulls made a comeback as they pushed the prices higher resulting in a probable breakout but it can be an eye wash as well since they were not able to close above the resistance of the black diagonal trendline. For bulls to re-conquer the trend they need to take out major resistances as fundamentally they are not that well supported as they used to be.
Bearish view – Bears landed in an array of dismay as price action does indicate a probable breakout on upside but all is not lost as they quite smartly defended the big resistance of black diagonal trendline offering themselves another chance to push back the prices with fundamentals being on their side. For bears to keep the trend intact they need to protect the key resistances and aim for a lower low.
On larger terms, Gold remains bearish and prices are expected to head lower but this can change if breakout gets confirmed.
Possible trades are on both sides but mainly on downside, gold can be sold below $1495 for the targets of $1480 and $1464 with a stop loss placed above $1505. Longer term target $1448.
Dips towards support (and breakdown region) can be used to create shorts for the above mentioned targets.
Longs can be useful for scalp trades only until the breakout gets confirmed.
Trade active
Comment:
First bear target met at $1480