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_XtraLarge.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
