GOLD - strong recovery may extend to daily cloud top at $1341
|GOLD
Wednesday’s strong rally was fuelled by weaker dollar on dovish Fed, marked the strongest daily gains since 06 September. Long bullish daily candle with long tail was left yesterday, generating strong bullish signal and sidelining downside risk after recent bears stalled on approach to key $1300 support.
Recovery rally probed above $1334 (Fibo 61.8% of $1352/$1306 downleg) with next key barrier at $1341 (daily cloud top), coming in near-term focus.
Consolidation of yesterday’s strong rally is underway and so far holding within narrow range, but extended downticks cannot be ruled out, as RSI and Slow Stochastic of 4-hr chart are emerging from overbought territory. In addition, Slow Stochastic of daily chart is approaching overbought territory and would signal hesitation on approach to daily cloud top barrier.
Initial support lies at $1331 (consolidation floor), below which comes $1329 (Fibo 23.6% of $1307/1336 rally), followed by 1325 (Fibo 38.2% retracement), where extended dips should find support.
Only return below $1318 (Fibo 61.8%) will sideline bulls.
Res: 1336; 1341; 1344; 1352
Sup: 1331; 1329; 1325; 1318
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