Gold Price Analysis: Bull's last dance to test $1,900 before significant sell-off

Gold is in a bullish 1-hour environment, testing 8-EMA/support structure confluence.
Bulls have risen through a short-term low volume area, but bears seek a run back to VPO and beyond.

Ross J Burland FXStreet

At the start of the week, it was noted there was potential for a restest of the demand structure in the 1850s:

The Chart of the Week: Gold and Silver, squeezing out the last drops?

However, bulls took control and the price corrected deeper, penetrating a 61.8% Fibonacci retracement level at $1,891 of the daily bearish impulse.

4-hour chart

In the above chart, the price rallied to test the 61.8% Fibo, but it has also formed a reverse head and shoulders.

That structure could be a spanner in the works for the bears expecting the current resistance structure to hold.

The price could become trapped at this juncture, but a breakout of either side of the channel could be an opportunity.

The volume point fo control for the 20th Oct to today's range is located at 1903, so if the price holds 1893 there are prospects for a day trade to test the vicinity of the figure.

However, while below the counter trendline resistance and aforementioned POC, there is a downside bias on the daily chart which brings the 1850 level back to the table.

Moving back down to the 4-hour time frame, there will need to be some consolidation and bearish structure formed in the low 1890s before an appropriate setup could be established.

For the time being, the environment is still marginally bullish.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD clings to gains near 1.3400

GBP/USD retreats after reaching a three-week high above 1.3430, challenging the 1.3400 yardstick on Thursday. Although easing political uncertainty in the UK helps the quid limit its downside, escalating tensions in the Middle East support the Greenback, keeping Cable under scrutiny.

EUR/USD: Daily gains appear capped by 1.1450

EUR/USD keeps the recovery in place and looks to consolidate its gains north of 1.1400 the figure at the end of the NA session on Thursday. The pair’s move higher appears in tandem with a modest pullback in the US Dollar despite geopolitical concerns in the Middle East remain unabated.

Gold flirts with two-day highs, approaches $4,130

Gold stages a modest rebound on Thursday, setting aside a three-day losing streak and managing to surpass the $4,100 mark per troy ounce. However, steady geopolitical tensions have revived concerns over persistently high global inflation, reinforcing expectations of higher rates across the board and somewhat curtailing the yellow metal’s upside potential.

AAVE eyes $100 after Stable Vaults launch

Aave edges higher above $90.00 at the time of writing on Thursday, amid broader price stabilization in the crypto market. The company has announced Stable Vaults, a platform that allows businesses to integrate fixed-rate stablecoin yield, mildly lifting sentiment in the ecosystem.

Japan may be changing its Yen strategy, but markets don’t look scared

Japan may be changing its intervention playbook, but that might not be enough to rescue the battered Yen. With USD/JPY hovering at four-decade highs, the currency’s weakness is being driven less by speculative pressure and more by a powerful structural force: the wide US-Japan rate gap.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.