Ivan Delgado
Independent Analyst
After breaking below the 38.2% retracement around $1285 last week, we noted two longer-term technical pattern objectives which were within reach: $1255/65 (2011-13 channel pattern projection) & $1190 (April-June triangle pattern projection). Sure enough, within a matter of days Gold achieved both of these noted targets, before ultimately bottoming near $1180 on Friday.
With our objectives met, we no longer maintain our bearish bias on Gold and shift to a neutral stance. Technically, Friday’s daily candle was a bullish engulfing candlestick and could mark a key turning point for the yellow metal, however with daily RSI still below the key 60/65 threshold (indicative of an overall downtrend) we feel the more prudent thing to do ahead of Friday’s US Employment Report is to remain on the sidelines. Furthermore, please keep in mind that July is the start of a new month, quarter and half-year for investors – Accordingly, we could see major market flows over the coming days (might seem illogical at times) and this may be exacerbated by thinner liquidity due to US Independence Day (July 4th) on Thursday.
For traders bullish XAUUSD, the previous 2013 lows may be key levels of resistance:
Ø $1270 – June 21st low
Ø $1320/22 – April 2013 low
Ø $1338/40 – May 2013 low
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
AUD/USD could extend the recovery to 0.6500 and above
The enhanced risk appetite and the weakening of the Greenback enabled AUD/USD to build on the promising start to the week and trade closer to the key barrier at 0.6500 the figure ahead of key inflation figures in Australia.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Bitcoin price makes run for previous cycle highs as Morgan Stanley pushes BTC ETF exposure
Bitcoin (BTC) price strength continues to grow, three days after the fourth halving. Optimism continues to abound in the market as Bitcoiners envision a reclamation of previous cycle highs.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Federal Reserve might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.