Gold suffered a red bar mainly due to technical reasons as the movement was on expected lines and the downside got limited to the previous low creating a double bottom which is an imminent reversal signal till the pattern holds significance. The world is still looking perplexed on the vaccine front as multiple issues have come forth mainly regarding their use and effectiveness against new mutations and the efficacy/dosage against the original covid-19, this simply shows the level of uncertainty the globe is in with no promising way out to restore/reopen the economies excepting the odd stimulus measures. In such a given scenario where the virus is still creating havoc along with other geopolitical issues its really hard to believe the low lying of the yellow metal as it remains the most sought after asset be it banks, governments or privates for hedging/vaulting/printing or other economic purposes. To watch next week – Fed Chair Powell testimony and other important economic data.
On the chart –
Gold moved along its expected path creating a double bottom which is a key reversal signal till the pattern holds which hopefully will given the even poor fundamentals ahead due to resurgence of virus (2nd wave) in some parts of the globe. With a rise in uncertainty due to confusing vaccinations and inability to suppress fresh spikes/cases it paves way to a now long awaited and foolproof rise in the gold price as technically it becomes fully supportive which went missing from last few weeks. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1789. If this is crossed it can move towards $1804. And if this is taken out it can rally to $1823.
2. Shorts can come into play only if the double bottom pattern gets invalidated except the evergreen scalp trades.
Bullish view – Bulls eventually failed to protect $1800 but on the optimistic side created a double bottom which is a major reversal signal and was on anticipated lines as well. Now, till bulls hold the pattern they can aim for higher highs as technically gold is at the best possible support and fundamentals are too creepy for any fall in gold so net net the current situation makes up a good recipe for a tempting upside.
Bears can come into the fray once the bullish pattern gets invalidated though the move lower needs to be comforting enough to create short positions as fake-outs are happening at large these days.
On larger terms, gold remains bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1792 for the targets of $1804 and $1823 with a stop loss placed below $1782. Longer term target $1839.
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.
On the chart –
Gold moved along its expected path creating a double bottom which is a key reversal signal till the pattern holds which hopefully will given the even poor fundamentals ahead due to resurgence of virus (2nd wave) in some parts of the globe. With a rise in uncertainty due to confusing vaccinations and inability to suppress fresh spikes/cases it paves way to a now long awaited and foolproof rise in the gold price as technically it becomes fully supportive which went missing from last few weeks. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1789. If this is crossed it can move towards $1804. And if this is taken out it can rally to $1823.
2. Shorts can come into play only if the double bottom pattern gets invalidated except the evergreen scalp trades.
Bullish view – Bulls eventually failed to protect $1800 but on the optimistic side created a double bottom which is a major reversal signal and was on anticipated lines as well. Now, till bulls hold the pattern they can aim for higher highs as technically gold is at the best possible support and fundamentals are too creepy for any fall in gold so net net the current situation makes up a good recipe for a tempting upside.
Bears can come into the fray once the bullish pattern gets invalidated though the move lower needs to be comforting enough to create short positions as fake-outs are happening at large these days.
On larger terms, gold remains bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1792 for the targets of $1804 and $1823 with a stop loss placed below $1782. Longer term target $1839.
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.
Trade active
Comment:
First long target met at $1804