Gold Daily chart 10:40AM EDT 1/2/2013
Support area: The previous update anticipated some support around the 200-day SMA down to a rising trendline that goes back to the lows in May. The rising trendline also was reinforced by a pivot area – the May-July ascending triangle resistance. After consolidating there briefly over the latter half of December, the gold market pushed prices up to start the new year.
Momentum, scenarios: The momentum has turned bearish in gold after the daily RSI tagged 30 and then held below 60 to tag 30 again. The current rally does not escape this mode. However, a push back above the 1705-1715 area, above the noted falling channel resistance along with the RSI pushing above 60, can be signs of a bullish continuation, at least to the 1755 pivot.
Otherwise, holding under 1700, and dragging back below the 200-day SMA, along with the RSI back below 40 would be signs of bearish continuation and focus on breaking below the current low near 1634.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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