Strong Momentum Confirmation using 5 Daily Simple Moving Average
If I plot the 5 Daily Simple Moving Average, you will notice that it has a very strong move upwards and can defy Resistance Lines and Indicators. Why 5 Day? 5 Day represents average price for one Week.
As you can also see from the chart when it fell to 1450 level, once it did not act as Resistance, a great rally ensued for Gold. I know that there are is an RSI Divergence on Daily and Weekly Chart due to Higher Prices but RSI does not agree. The only explanation I can give that defies it is the 5 Day Simple Moving Average as I learned years ago that it is a measure of price momentum Going Up and Going Down. Hope it helps in your trading. :)
As you can also see from the chart when it fell to 1450 level, once it did not act as Resistance, a great rally ensued for Gold. I know that there are is an RSI Divergence on Daily and Weekly Chart due to Higher Prices but RSI does not agree. The only explanation I can give that defies it is the 5 Day Simple Moving Average as I learned years ago that it is a measure of price momentum Going Up and Going Down. Hope it helps in your trading. :)