Hi Traders,
Over the last few weeks we have seen gold decline after hitting strong resistance/supply at around 1830, following FOMC minutes, which was less a than anticipated result, gold spiked to find some liquidity around 1787 and crashed again finding support around 1737 area and resting the week on a weekly support around 1750.
We find that gold has had a healthy correction to the 61.8% fibonacci retracement from the low of 1676 to 1830, correcting to 1737.
This price action forms an ABCD pattern with a 61.8% retracement - common for the start of wave 2 of an impulse wave and C in an ABCD pattern .
We would look for an extension to 1895 for the complete ABCD pattern where AB = CD.
However, we have strong resistance / supply around 1833 which could stop gold , with the recent news of the USD not doing so well under COVID pressure this could be the start of the next covid economic wave, hence the FED not tapering in the recent FOMC meeting.
There is also a falling wedge forming on the 4H chart as shown in the above with a strong bullish divergence on the RSI .
We are also forming a right shoulder on the daily chart - a break of 1833 neckline could see 1850 - 1900 quite easily.
I personally feel we might dip a little to test 1740-42 again before starting the run to 1830 and more possibly.
With this being said gold is looking bullish fundamentally but is still in a somewhat downtrend with a lot of selling pressure technically. I believe that despite this we could have a change of hands around this area given the fundamental news of late.
Please trade with caution.
This is not financial advice.
Over the last few weeks we have seen gold decline after hitting strong resistance/supply at around 1830, following FOMC minutes, which was less a than anticipated result, gold spiked to find some liquidity around 1787 and crashed again finding support around 1737 area and resting the week on a weekly support around 1750.
We find that gold has had a healthy correction to the 61.8% fibonacci retracement from the low of 1676 to 1830, correcting to 1737.
This price action forms an ABCD pattern with a 61.8% retracement - common for the start of wave 2 of an impulse wave and C in an ABCD pattern .
We would look for an extension to 1895 for the complete ABCD pattern where AB = CD.
However, we have strong resistance / supply around 1833 which could stop gold , with the recent news of the USD not doing so well under COVID pressure this could be the start of the next covid economic wave, hence the FED not tapering in the recent FOMC meeting.
There is also a falling wedge forming on the 4H chart as shown in the above with a strong bullish divergence on the RSI .
We are also forming a right shoulder on the daily chart - a break of 1833 neckline could see 1850 - 1900 quite easily.
I personally feel we might dip a little to test 1740-42 again before starting the run to 1830 and more possibly.
With this being said gold is looking bullish fundamentally but is still in a somewhat downtrend with a lot of selling pressure technically. I believe that despite this we could have a change of hands around this area given the fundamental news of late.
Please trade with caution.
This is not financial advice.