Weekly Report 25/07 -29/ 07/ 2011
Surpassing 1609.00 zones has fixed the bearish sign of Stochastic which prevented us during the past three days to specify a direction for gold. Furthermore, this incline occurred during the Asian session succeeded in activating the recently created harmonic pattern of Deep Crab Pattern which was published by Scott Carney as we discussed before. AB leg achieved a correction which was closer to 88.6% for XA leg than 76.4% retracement. Thus; Fibonacci projection of 161.8% for the XA leg should be the first PRZ of the pattern due to the harmonic rules of this structure. To conclude, the bullishness will be in favor during this week with targets at 1645.00, supported by the positivity appearing on Vortex indicator. Carefully note that, coming back below 1578.00 before hitting 1627.00 zones will give us reasons for concern. Finally, the subsidiary image is an educational one explaining the rhythmic of Fibonacci sequence for the aforementioned harmonic pattern.
The trading range for this week is among the key support at 1554.00 and key resistance now at 1694.00.
The general trend over the short term basis is to the upside, targeting $ 1694.00 per ounce as far as areas of 1430.00 remain intact with weekly closing.
|Recommendation||Based on the charts and explanations above our opinion is, buying gold around 1609.00 targeting 1645.00 and stop loss below 1584.00 might be appropriate.|