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Market towards key test after positive long term signal breached

GOLD (XAU) Overview

Trading Outlook:

A closing breach of $1276 is a big bearish breakdown and completes a big medium term top pattern to imply $1206. Intraday rallies are increasingly being sold into. A key band of overhead supply is now between $1276/$1280.

  • $1266 – 23rd April low and 20th December high
  • $1250 – 10th December high
  • $1240 – old pivot
  • $1276 – 23rd April high
  • $1280 – Old key support is initial resistance
  • $1290 – Near term pivot
Today’s Morning Commentary:

A breakdown below $1276 resulted in some consolidation in front of Easter, but once clear of the holiday period, traders have returned to drag the price down once more. Another positive long term signal was breached yesterday as the 144 day moving average (c. $1268) and now the market is on its way towards a key test of the eight month uptrend at $1261.50. This trend is the final realistic argument for long term bull control which is now close to being broken. Momentum is increasingly negatively configured and does not bode well for the bulls. Chiefly, the RSI is in the low 30s (eight month lows) but considering the bear market moves of April to July 2018 saw the RSI in the low to mid-20s, there is further downside potential. The MACD lines accelerating lower also confirms this. Near term technical rallies are now a chance to sell, with the overhead supply between $1276/$1280 a considerable barrier. Initial support at $1250 but the pivot around $1240 is also open.

Chart of the day:

Daily XAU

Hourly XAU

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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.