XAU/USD 1H Chart: Channel Down
Comment: Although on Monday it still seemed that the gold was going to resume last week’s rally, on Tuesday the price plunged through the key mark of 1,150 dollars. As a result, XAU/USD is now in a bearish channel. The yellow metal is expected to bounce off of the down-trend line at 1,130 and thus start a journey towards the lower boundary of the pattern and the August 18 low at 1,110. The bearish outlook will be invalidated in case the 200-hour SMA is breached. This will imply an extension of a recovery back to the August 24 high at 1,1170. As for the positioning of the SWFX market participants, 56% of traders are currently holding long positions and 44% are holding short positions.
EUR/GBP 1H Chart: Triangle
Comment: Despite the fact that EUR/GBP failed to sustain upward momentum after hitting 0.7420, we retain a bullish outlook. The main reason is formation of a triangle, a continuation pattern, and the period Aug 19-24 was bullish for the Euro. Once breached to the upside, the figure implies a 140-pip move, but we must take into account resistances at 0.7364 and 0.7424. The latter is formed by the weekly R2 and Aug 24 high.
At the same time, a close below 0.7310 should lead to a sell-off down to 0.7190, where the weekly pivot point meets the long-term moving average. In the meantime, the traders are sceptical of a rally, being that 57.5% of all open positions are short.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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