Gold ultimately slipped into bear territory as it breached the long standing support of the diagonal black trendline on closing basis ending well below the $1500. The downturn was further triggered by a host of positive news coming from different parts of the globe toning down the tensions with the pick of the lot being “an agreement for further agreements” between U.S and China – a partial trade deal getting finalized with phase one underway with additional tariffs to be imposed in mid October getting roll-backed de-escalating the 18 month old trade war. Other important development was a nearing certainty of a Brexit in an orderly manner with a deal. Technically gold had already suffered a breakdown which was again tested and confirmed as the prices collapsed after hitting the resistance allowing the bearish trend to further strengthen. To watch next week – Important data from around the globe.
On the chart –
Gold continued its bearishness as the price saw a correction of $16 owing to easing of trade tensions and other positive political developments. The major support of the diagonal black trendline finally gave way adding to downside momentum as risk-on sentiments continued to improve. Downside now looks quite adventurous as the support was broken and the trend has definitely turned bearish. We have 2 scenarios –
1. With the last major support gone, it will be difficult for bulls to garner enough power to even scale $1500 conclusively, still scalps remain the way for long trades.
2. Gold closed below the support, till its defended gold can fall to $1480. If this is broken it can slide to $1464. And if this is taken out it can slip towards $1448.
Bulls look defeated as they failed to hold onto the crucial support on weekly timeframe.
Bearish view – Bears continued their assault finally breaking through the long standing support as risk-on sentiment weighed heavily on the bulls. Fundamentals supported the bears as trade tensions eased along with positive news coming from Britain regarding orderly Brexit. With both technical and fundamentals showing strong support for the bears after many weeks it looks quite possible for gold to test the major pattern breakout area which it hasnt yet done and for that to remain in sight bears must defend the breakdown.
On larger terms, Gold remains bearish and prices are expected to head lower.
Possible trades are on both sides but mainly on downside, gold can be sold below $1480 for the targets of $1464 and $1448 with a stop loss placed above $1491. Longer term target $1434.
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 breakdown gets invalidated.
On the chart –
Gold continued its bearishness as the price saw a correction of $16 owing to easing of trade tensions and other positive political developments. The major support of the diagonal black trendline finally gave way adding to downside momentum as risk-on sentiments continued to improve. Downside now looks quite adventurous as the support was broken and the trend has definitely turned bearish. We have 2 scenarios –
1. With the last major support gone, it will be difficult for bulls to garner enough power to even scale $1500 conclusively, still scalps remain the way for long trades.
2. Gold closed below the support, till its defended gold can fall to $1480. If this is broken it can slide to $1464. And if this is taken out it can slip towards $1448.
Bulls look defeated as they failed to hold onto the crucial support on weekly timeframe.
Bearish view – Bears continued their assault finally breaking through the long standing support as risk-on sentiment weighed heavily on the bulls. Fundamentals supported the bears as trade tensions eased along with positive news coming from Britain regarding orderly Brexit. With both technical and fundamentals showing strong support for the bears after many weeks it looks quite possible for gold to test the major pattern breakout area which it hasnt yet done and for that to remain in sight bears must defend the breakdown.
On larger terms, Gold remains bearish and prices are expected to head lower.
Possible trades are on both sides but mainly on downside, gold can be sold below $1480 for the targets of $1464 and $1448 with a stop loss placed above $1491. Longer term target $1434.
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 breakdown gets invalidated.
Trade active
Comment:
With Brexit deal done, it will further open downside as a big uncertainty gets neutralized