Gold: Due for a break to the upside
So this is how Gold is playing out....We made the base....back towards the end of last year....we have rallied..just to under the 1300 mark.. now what we are seeing is a continuation pennant...As the prior trend is bullish....we would expect Gold to break out to the topside....The technicals are ripe for this...the sideways movement we have seen in making this pennant has eased the overbought scenario and leaves us ready to break to the topside....Now the measured target from this pennant is located at 1330....This however is the first target...The 2nd target is again in the 1365 area Now we know that Gold is being capped here..the 38.2 monthly Fib is at 1380 and on 7 different attempts we have failed to break this barrier...There is a reason for this....but that is by the by....My point is that Gold is due for a break to the topside...Now the closer to the Apex we get...is the chance of a false break... This is easily spotted..the base of the pennant today is 1285....Our daily pivot at 1291....our weekly pivot is at 1289 and the 9 day M/A @ 1290...Add all these things together and we find that there is much more support for Gold at lower levels...much more probability of the market rising higher looking at the chart...We therefore are buyers on dips.. or a break of 1302....Use these continuation patterns as they are supposed to be used....and stay within the range....but be aware that the market is poised for a move higher...
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Author
Carol Harmer
Charmer Trading
Carol Harmer has over 39 years experience of analysing and trading the world's markets and is undoubtedly one of the most respected technical trader in the world today.
