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Intraday Breach Increases Gold Breakdown Threat


Market Overview

GOLD (XAU)

An intraday breach of $1276 is a massive red light warning for the bulls. A decisive closing breach would complete a big outlook changing move. Intraday rallies increasingly being sold into.

Support:
  • $1272.70 – 16th April low
  • $1266 – 20th December high
  • $1250 – 10th December high
Resistance:
  • $1280 – Old key support is initial resistance
  • $1290 – Near term pivot
  • $1296.50 – 12th April high

With risk appetite improving, the selling pressure on gold continues to ramp up. For months there has been a basis of support between $1276 (January low) and $1280 (March/April lows). However yesterday’s intraday breach of $1276 really increases the threat of a breakdown. The bulls clung on into the close and a closing breach of $1276 was averted, however, the threat remains. A completed key breakdown would take gold to its lowest since December and a big top pattern. Momentum indicators have been deteriorating for a while now and with the MACD and Stochastics accelerating lower into negative configuration there is further downside potential. The RSI below 40 is also leading the market lower. There is a degree of unwind this morning and it will be interesting to see how the old support at $1280 is treated. This should be a basis of overhead supply now. In fact there is a near term sell zone now $1280/$1290. Any failed rally is a chance to sell. The hourly RSI is failing consistently now between 40/50.

Chart of the day:

Daily XAU 2019-04-17

Hourly XAU 2019-04-17


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    Research Risk Warning

    At Hantec Global Ltd we provide an execution only service. Any opinions expressed by analyst Richard Perry should not be construed as investment advice or an investment recommendation. This report does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. Forex and CFDs are leveraged products which can result in losses greater than your initial deposit. Therefore you should only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such transactions.