Gold made a stunning recovery from the lows creating a very bullish candle majorly on back of increased uncertainty due to the raging pandemic. The pandemic led fear is just heightening as more and more countries push for stricter measures to curb the spread of the virus in the ongoing 2nd wave even after milestones getting achieved in vaccination drives. The most terrorizing part is the dislodging of economic recovery as lockdowns are the only solution when people fail to understand the gravity of the situation and this is probably happening due to the irrational thought process that post vaccination the virus would not be of a concern and the life would run like ever before, and this is also the reason behind the rapid spread of the virus in the current wave which is more deadlier given the highest death rate doing rounds nearly daily. For gold its certainly a win win situation given it is the safest haven and the last week’s tremendous technical show adds another level of bullishness to the yellow metal. To watch next week – IMF meeting, Fed minutes, Powell speech and other important economic data.
On the chart –
Gold made a massive bullish candle as it recovered after hitting the low which also strengthens the bullish case as it created a double bottom which is a major reversal pattern and one which was due for fully confirming the uptrend. This bounce after making double bottom pattern was pretty easy to anticipate as such is the ferocity of major reversal patterns. Probably the low has been confirmed and the journey towards new high has begun which will get fueled further once the gold breaks out of the flag/consolidation. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1740. If this is crossed it can move towards $1755. And if this is taken out it can rally to $1771.
2. Bears got a chance only to get deceived again as gold created a major bullish reversal pattern excepting the evergreen scalp trades.
Bullish view – Bulls had another victory as the low got retested and the pattern of double bottom affirmed the trend further. The week had a nasty start with the bulls having a tough time protecting the supports but once they were able to defend the low which was crucial to remain in the game there was no looking back for the price as it recovered sharply to close in the green which in turn created a super bullish weekly candle. Fundamentals remain supportive for gold since the pandemic began and now technicals too have turned exceptionally bullish after the double bottom pattern which should now allow the yellow metal to break free of the flag/consolidation on the upside which it is in since weeks.
Bearishness fails to garner any attention again.
On larger terms, gold continues to remain bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1735 for the targets of $1740 and $1755 with a stop loss placed below $1725. Longer term target $1771.
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 made a massive bullish candle as it recovered after hitting the low which also strengthens the bullish case as it created a double bottom which is a major reversal pattern and one which was due for fully confirming the uptrend. This bounce after making double bottom pattern was pretty easy to anticipate as such is the ferocity of major reversal patterns. Probably the low has been confirmed and the journey towards new high has begun which will get fueled further once the gold breaks out of the flag/consolidation. We have 2 scenarios –
1. Gold closed above the support, till this is held it can go to $1740. If this is crossed it can move towards $1755. And if this is taken out it can rally to $1771.
2. Bears got a chance only to get deceived again as gold created a major bullish reversal pattern excepting the evergreen scalp trades.
Bullish view – Bulls had another victory as the low got retested and the pattern of double bottom affirmed the trend further. The week had a nasty start with the bulls having a tough time protecting the supports but once they were able to defend the low which was crucial to remain in the game there was no looking back for the price as it recovered sharply to close in the green which in turn created a super bullish weekly candle. Fundamentals remain supportive for gold since the pandemic began and now technicals too have turned exceptionally bullish after the double bottom pattern which should now allow the yellow metal to break free of the flag/consolidation on the upside which it is in since weeks.
Bearishness fails to garner any attention again.
On larger terms, gold continues to remain bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1735 for the targets of $1740 and $1755 with a stop loss placed below $1725. Longer term target $1771.
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 $1740
Comment:
Second long target met at $1755