Gold 1 OZ (XAU=X) gaining power this week
The economic highlight at mid-week is the Federal Reserve’s Open Market Committee (FOMC) meeting that began on Tuesday morning and ends Wednesday afternoon with a statement on monetary policy. No change in monetary policy is expected. However, traders want to know if the Fed today will tip its hand regarding the course of monetary policy in 2019.
Many expect the Fed to lean toward the accommodative side of monetary policy today. Such would be bullish for the raw commodity markets, including the precious metals. Markets could become active and volatile following the results of the meeting, which includes a press conference by Fed Chairman Jerome Powell after the FOMC statement. Powell is getting a reputation for putting his foot in his mouth while making comments to the press or at speeches.
Technically, the gold bulls have the firm overall near-term technical advantage and have gained power this week. Prices are in a 2.5-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in February futures above solid resistance at $1,330.00. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at last week’s low of $1,275.30. First resistance is seen at today’s high of $1,310.50 and then at $1,320.00. First support is seen at $1,300.00 and then at this week’s low of $1,296.50.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 1,340.05.
The projected lower bound is: 1,301.68.
The projected closing price is: 1,320.86.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 94.9895. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 18 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 72.99. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 14 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 212.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 7.050 at 1,318.910. Volume was 8,900% above average (trending) and Bollinger Bands were 6% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,293.66 1,264.15 1,245.54
Volatility: 12 10 11
Volume: 1,776 355 89
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAU= is currently 5.9% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume into XAU= (bullish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 38 periods. Our momentum oscillator is currently indicating that XAU= is currently in an overbought condition.