Thursday, 5 January 2017

Dawn Light Shines Bright

The Trump factor mirrored in Gold weakness and during the last six weeks we witnessed strong bearishness. Prices were driven lower with around $200. Market conditions were within extreme oversold area.
Now the setup has changed into bullish mode in the short-term. Since late December 2016 Gold is moving up and formed bullish channel as shown on the hourly chart and prices are seen higher with around $50. Today a fresh new daily high was marked at $1185. Well, the surge of the price is due to the continuation of the of the latest bullish trend, but is also supported by the US dollar’s current weakness. And this is an important point that should be considered. The greenback is now exposed to large sell-off and Gold is not moving up without motivation.
Technical indicators are recovering from overbought territory, but still are located at north area. Both RSI and Stochastic are slightly turning to south on the hourly chart, but if we look at the H4 they are still confirming the bullish trend.
Support now is seen at 23.6% Fibonacci retracement at $1173 (latest decline from Presidential elections high at $1336 to December 15th low at $1122). Strong resistance is located at $1188 (December 2nd high). Should the price cross to above this level, then bullishness in longer term could be possible.



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