Gold 1 OZ (XAU=X) prices rudderless as Brexit news-flow offers conflicting influences
Gold prices struggled to for direction, trading inversely of seesaw swings in the US Dollar. It succumbed to cross-currents from a jump in the GBP/USD exchange rate after UK Prime Minister Theresa May floated the possibility of a second Brexit referendum. The move promptly fizzled however, with a rebound in the benchmark currency cooling anti-fiat demand and forcing the yellow metal to retreat.
All eyes now turn to minutes from May’s FOMC meeting. Commentary reiterating officials’ wait-and-see approach amid a raft of global uncertainties may cool rate cut hopes. That seems inherently USD-supportive, with haven demand acting as a further accelerant as markets pining for policy support tilt into risk-off territory. Gold is vulnerable in this scenario.
Gold prices are still probing support at a rising trend line guiding them higher since mid-August 2018. This is bolstered by the 1260.80-63.76 inflection area. A daily close below that targets the 1235.11-38.00 zone thereafter. Alternatively, a rebound above resistance in the 1303.70-09.12 region broadly aims for February’s high at 1346.75, with a minor hurdle in the 1323.40-26.30 price band along the way.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1,292.43.
The projected lower bound is: 1,253.16.
The projected closing price is: 1,272.80.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 15.7579. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 21 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 41.05. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 63 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 -104.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 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 sell 1 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -1.360 at 1,273.365. Volume was 8,900% above average (trending) and Bollinger Bands were 32% narrower than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,285.13 1,290.11 1,257.13
Volatility: 9 10 11
Volume: 1,935 387 97
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 1.3% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 6 periods.