Gold Technical Update
After initially respecting a channel support and pushing up sharply, gold failed to re-test 1763 to break toward 1800. Instead as we can see in the 4H chart, the market went into consolidation mode anchoring out of the channel in a sideways manner. We can see a slightly downward wedge forming. The RSI also failed to push back above 60, which would reflect recharge of the bullish momentum. Instead it is now basically stuck between 40 and 60, a sign of consolidation momentum.
The first bearish target for a market that can slide below the consolidation pattern is 1671, 38.2% retracement and 200 simple moving average in the 4H chart. The next would be near 1643 61.8% retracement and near some previous consolidation lows that go from 1640-1650. If instead, the market breaks above the pattern, and the RSI pops back above 60 without breaking below 40, we are in bullish continuation. A test of 1763 then 1800 would be the next targets before opening up the record high at 1920.75.
This analysis if of a snapshot of the market and the anticipation based on the current conditions. Adjustments are often needed especially when preparing for a trade as well as during a trade. To follow up and explore trading plans and risk management techniques as well as fundamental bias and event risks, don't miss IBTrade's daily Market Intelligence Briefings live at 8:00AM EST throughout the week. To gain free access to these sessions, register at here at IBTrade. You will receive and email with the link and password before each session once you have registered.
Fan Yang CMT is the Chief Technical Strategist for IBTRADE, trader, educator and a main contributor to FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.