Gold 1 OZ (XAU=X) prices have started to scale back after finding resistance at prior six-year-highs
It was a strong month for gold as prices continued to ascend throughout June, with gains each week of the month into the end of Q2. Price action set a fresh six-year-high by breaking-out to the 1439 level; but buyers weren’t able to muster much strength thereafter, leading to a three, now four-day pullback in gold prices. Taking a step back, and the resistance zone produced from that prior six-year-high to the 50% marker of the 2012-2015 major move has thus far held the highs in the bullish breakout in gold.
The first support zone looked at in last Wednesday’s article has been unable to since hold the lows, and this came in around the 1400 level on the chart which is confluent with the 23.6% Fibonacci retracement of last month’s bullish move. Additional support potential exists a bit deeper, around 38.2 and 50% retracements from that same prior move, both of which sync with prior price inflections to create confluent areas of interest.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 1,346.09.
The projected upper bound is: 1,413.64.
The projected lower bound is: 1,358.87.
The projected closing price is: 1,386.25.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend.
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 25.6244. This is not an overbought or oversold reading. The last signal was a sell 2 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 61.62. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 22. This is not a topping or bottoming area. The last signal was a sell 2 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 22 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -25.035 at 1,384.065. Volume was -0% below average (neutral) and Bollinger Bands were 140% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,394.52 1,316.18 1,277.70
Volatility: 20 13 12
Volume: 0 0 0
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= gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
PREC.M.XAU= is currently 8.3% 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 34 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.
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