Gold posted massive gains of $35 in the week which was having a range of $43 making it the biggest week of 2019 and the highest weekly gain in last 3 years. Gold zoomed towards the highs in the fear fueled rally assisted by a near certainty of a rate cut by the Fed later this month due to appalling data which signaled intensive slowdown. The resistances were taken out with ease and gold registered a new high for the year. Technically, gold stopped at the top of the cup and handle pattern and was denied a break from it which may offer some bearishness but the ferocity of the move continues to keep the bullish trend intact.
On the chart –
Gold registered a fresh high for the year before retreating back towards the key level of $1341. The buying frenzy catapulted the price to $1348 but it was unable to go further as it had hit the top of the pattern which if crossed would result in a breakout of over $180. Fundamentally, gold still gathers strong support from global slowdown and a weakening dollar. We have 2 scenarios –
1. Gold closed above the support, till this is held it can move to $1356. If this is taken out it can rally to $1365. If this is crossed it can move towards $1375.
2. Bears were obliterated as the price raced towards new high. But, the resistance offered by the pattern top can interest the bears for scalp trades as the broad trend remains bullish.
Bullish view – Bulls ripped through the resistances as they registered the largest weekly gain in last 3 years. It was clearly evident that such a rally was a fear fueled one as every dip was bought and the price continued to march ahead. For bulls to continue to thwart the bears they need to break out of the cup and handle pattern and also defend the supports, if successful a upmove of over $180 will be on the cards.
Bearish view – Bears were completely drained as they were unable to even offer a mere pullback. Though they have some chances now as the price was stopped at the pattern resistance which if held can result in a downside.
On larger terms, Gold continues to remain bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1341 for the targets of $1356 and $1365 with a stop loss placed below $1327. Longer term target $1372.
Dips towards support (and breakout region) can be used to create longs for the above mentioned targets.
Shorts can be useful for scalp trades only.
On the chart –
Gold registered a fresh high for the year before retreating back towards the key level of $1341. The buying frenzy catapulted the price to $1348 but it was unable to go further as it had hit the top of the pattern which if crossed would result in a breakout of over $180. Fundamentally, gold still gathers strong support from global slowdown and a weakening dollar. We have 2 scenarios –
1. Gold closed above the support, till this is held it can move to $1356. If this is taken out it can rally to $1365. If this is crossed it can move towards $1375.
2. Bears were obliterated as the price raced towards new high. But, the resistance offered by the pattern top can interest the bears for scalp trades as the broad trend remains bullish.
Bullish view – Bulls ripped through the resistances as they registered the largest weekly gain in last 3 years. It was clearly evident that such a rally was a fear fueled one as every dip was bought and the price continued to march ahead. For bulls to continue to thwart the bears they need to break out of the cup and handle pattern and also defend the supports, if successful a upmove of over $180 will be on the cards.
Bearish view – Bears were completely drained as they were unable to even offer a mere pullback. Though they have some chances now as the price was stopped at the pattern resistance which if held can result in a downside.
On larger terms, Gold continues to remain bullish and prices are expected to head higher.
Possible trades are on both sides but mainly on upside, gold can be bought above $1341 for the targets of $1356 and $1365 with a stop loss placed below $1327. Longer term target $1372.
Dips towards support (and breakout region) can be used to create longs for the above mentioned targets.
Shorts can be useful for scalp trades only.
Trade active:
Trade Active
Comment:
First long target met at $1356
Trade closed manually