Gold refreshed daily tops during the early European session, albeit lacked any strong bullish conviction and remained well below three-week tops set on Friday.
The precious metal failed to capitalize on its goodish intraday positive move on Friday, rather witnessed some selling near the $1520 region amid fading safe-haven demand. This coupled with a late pickup in the US Dollar demand exerted some additional downward pressure on the dollar-denominated Gold.
Meanwhile, expectations that the Fed will cut interest rates further at its upcoming meeting on October 29-30 helped the non-yielding yellow metal to regain some positive traction on Monday. However, a combination of negative forces kept a lid on any strong follow-through move up, at least for now.
From a technical point of view, the price was able to return below the resistance of the short-term uptrend channel (White trend lines), but remained above the strong resistance (light blue trend line).
On a weekly chart, the price has formed a price action formation, suggesting that a long-term upward movement is possible.
50 and 200 period averages and the middle bollinger line play a resistance role.
RSI is coming out of overbought territory and now is below 50% which suggests that the downward movement is almost complete.
Option 1: The price reaches the broken resistance (the light blue trend line) whereby the price action formation confirms the breakthrough. With this option, the price will continue in an upward direction. (This option is no longer valid since the price broke below the support/resistance.)
Option 2: Price breaks the average of the bollinger and the diagonal. In this option a drop to the lower of the bollinger and white diagonal support is possible. From there on, if the price action formation is pointing for another appreciation we can enter in long positions.
Alternatively, if the price breaks the last support we see a drop for the previous bottom at $ 1460, and if it breaks, the price will continue in a downward direction for the test at $ 1440
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.