Gold price failed to gain a footing above the 80.0% weekly basis triggered a retracement to the parallel support at 1320.50$. The yellow metal extended its rebound and retested the crucial hurdle at the key fib reaction. The indicators gave a mixed outlook as the stochastics about to turn bearish. Especially the RSI has been painting negative divergence, and we cautioned traders twice this week.
Chart of the Week: Gold
Gold: The price has been moving higher but overbought and negative RSI divergence could pause the rally sooner.
Support at the 1320.50$ held in Asia today a breakdown could shift the focus towards 20DMA at 1317.00$. Overall, the support zone finds between 1320.00-1317.00$. A break below the 20DMA may trigger losses to 1302.00$. To maintain the current rally, the bulls need to hold 1302$. Resistances seems to be at 1328.00$, 1335.00$ and 1350.00$
- Bulls: As long as 1302.00$ is supporting, watch out for 1345.00$ and 1350.00$.
- Bears: Sell on raise favors the trend with sl above 1376.00$ (closing basis) it’s July 2016 high coincides with the 38.2% fib reaction of 1920.00$-1046.00$ correction. Strong resistance zone seems between 1350.00$-1360.00$.
What if the price close above?
On the upside, protracted buying may trigger on a break above 1376.00$ (Weekly closing). In this case, the price may pave the way for higher prices through 1415.00$ and 1480.00$ levels in the coming months.
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