Dear Traders, even on a red day, gold managed to hold the 1917-1922 area of resistance during its attempt to test the 50d moving average.
This area, identified by two red horizontal lines, is extremely important as it acted as a support for over one month, and now, after what we can call a "fake breakout" of the descending triangle, the price is back up.
TARGET
As long as gold manages to stay above 1917, out target is long to the 1940-1960 fiboacci extension area, identified by a red rectangle on the chart. If the view is bullish, then this is the perfect point for a Long. Our mental Stop Loss is located at 1915.
THE ALTERNATIVE SCENARIO
Should the previous scenario not play out, with the price breaking below 1917, it can retest the descending trendline that was broken upward by the Friday's candle, probably at the psychological level of 1900.
WHAT TO PAY ATTENTION TO
Tomorrow at 2.30pm CEST, data about US inflation MoM will be released. This is particularly important for gold as a low inflation lowers the cost of holding gold. If as, expected, inflation will be 0.2%, halved from the last month, it will be another positive factor.
Also, the sensation is that, with the US election approaching, Gold will be bullish as long as the SP500 will be. Indeed, at this moment, higher SP500 price is also perceived as increased future downward risk. For this reason, much attention has to be given to SPX first, as it seems the leading market for all other instruments now, even for Bitcoin.
the resistance trend line isn't credible enough, it should touch the three tops the were present at 2017, 1993 and 1974 , once you adjust the resistance line , you'll see that we still have no confirmation of a breakthrough yet, if anything, analysis is in favour of a short downfall before a major breakthrough.
@pooya762, I’d wait for a reaction once it hits 1936 only then we can really determine where the direction of the trade is going, keep an eye out for candle stick patterns and lower time frame support and resistance line. If it does go down we should expect a retest of 1900 and potentially 1890. It’s worth also looking at DXY charts as well :)