Gold breaks strong support at 1937/34 to turn the outlook negative now [Video]
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Gold Spot broke back below support at 1937/34 for a more negative outlook.
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USDJPY makes the biggest single-day gain since the rally started on 7th March, having risen every day except 2 in 3 weeks. This could be the end of a short squeeze as bears finally throw in the towel. Although there is no sell signal despite severely overbought conditions, I think there is a good chance the pair has seen a high for the bull run at this stage.
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EURJPY rocketed 350 pips, as far as 137.52, then gave up 200 pips of the gains. Although there is no sell signal despite severely overbought conditions, I think there is a good chance the pair has seen a high for the bull run at this stage.
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NZDJPY shot higher by 200 pips to hit 8674 but has given up 150 pips of the gains. Perhaps yesterday was a short covering day, meaning the end of the short squeeze & now prices will see a drift lower.
![Gold breaks strong support at 1937/34 to turn the outlook negative now [Video]](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/stacked-gold-bars-13094022.jpg)
Daily analysis
Gold broke strong support at 1937/34 to turn the outlook negative now. Holding below 1935 targets 1917/15, 1910 & perhaps as far as 1905/03. Further losses retest the March low at 1895/94.
The important longer-term pattern is the huge double top after the March high at 2069 when prices failed to beat the all-time high at 2072. As long as prices stay below 1935/40 the short term outlook is negative (& in the longer-term prices could head significantly lower). Shorts need stops above 1950.
USDJPY runs up another 300 pips in just a morning before giving up almost half of the gains. I think the pair will head lower. Minor support at 123.60/40 but below here can target 123.20/10 & support at 122.70/50. A low for the day is expected but longs need stops below 122.30.
Minor resistance at 124.15/25. Strong resistance at yesterday's high of 125.00/10. A break above 125.30 however can target 125.60/70.
EURJPY has minor support at 135.60/50 but below 135.20 can target better support at 134.50/30. Watch for a low for the day. Longs need stops below 134.10. Minor resistance at 136.25/35. A break above 136.50 can retest yesterday's high at 137.40/52. A break higher can target 137.90/99.
NZDJPY may finally react to severely overbought conditions. Minor support at 8510/8490 but below here can target 8450/40 & better support at 8410/8390. Watch for a low for the day - longs need stops below 8370.
Minor resistance at 8560/70. However if we continue higher we could expect strong resistance at yesterday's high of 8655/75. A break higher however is a buy signal.
Author
Jason Sen
DayTradeIdeas.co.uk
Jason Sen began his career in the options pits on the trading floor of LIFFE in 1987 at the age of 19, making markets on his own account. In 2001 when the trading floor closed he successfully made the transition to day trading on computer screens.
