The gold price reached the long-term resistance target projection level of $1,360 before consolidating and retreating. The retreat offers a buying opportunity for an uptrend continuation back to $1,360 and higher. There are four technical features that suggest a bullish rebound.
The first feature is the strength of the underlying uptrend. This is shown with the Guppy Multiple Moving Average (GMMA) indicator. The long-term group of averages is consistently well separated. When prices dipped in June 2016, the long-term group did not develop any compression. This shows good investor support.
The current price dip has also not caused any compression in the long-term group of averages. This shows there is strong investor support for the trend. Investors are buyers when there is any price weakness.
The second feature is the recent minor support and resistance level near $1,290. This is not a strong resistance feature. It is important because it is also near to the upper level of the long-term GMMA. This provides two support features for any retreat in the gold price. This strong support provides a good base for a rally rebound and uptrend continuation.
The third feature is the behavior of the short-term group of averages. They are developing some compression but this is a slow retreat. The compression is not sharp and rapid so this suggests simple trading activity rather than signaling a change in the underlying trend. The compression behavior is similar to the temporary retreats in April and June.
The fourth feature on the weekly gold chart is the breakout from the fan trend line pattern. The four downtrend lines have a common starting point from the high in October 2012. This pattern gives early warning of a substantial and sustainable trend change so investors are confident this uptrend can continue.
The first upside target for gold at the historical resistance level near $1,360 has been achieved and has been followed with consolidation behavior. This consolidation is part of a longer-term uptrend behavior so traders should watch for a rebound rally and retest of the $1,360 level. Aggressive traders should buy the rebound rally as it moves towards $1,360. Cautious traders should wait for the price to move above $1,360 before they enter the market. The upside target is near $1,580.
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.