Gold Weekly Recap
After last week’s brief sell-off, the Bulls have returned Gold to the 1200 pivot area. Last Friday, matters remained a concern and the report advised that a push-back towards 1191 for the close was required to calm nerves. This is what happened and this week Gold has witnessed further gains. It is still struggling to stay above 1200 which is a worry however, there are signs on the weekly chart that Gold could be base building.
Gold the Week Ahead
There has been a sideways trend for the past six to seven weeks. It remains a concern that Gold has not staged a bounce, but downward movement has halted. Note that the last four bars on the weekly chart are known as High Wave Candles. This is when there is a small body, the candle, with decent length wicks, the shadows. These are not strong reversal signals in isolation but are often seen in reversal patterns that take time to develop such as a Frying Pan Bottom. There is potential for this to appear on the weekly chart. The long move down is the handle, the flattening out is the base of the pan and what should be looked for is modest gains over the coming weeks to complete the shape. In the meantime, there is benchmarks at 1182 to the downside and 1214 in the other direction. The catalyst for both could be a breach on a closing basis.
Last Friday, the report stated that USDJPY was heading to a strong resistance level up at 114.73 and needed monitoring for any signs of failure on an approach to this point. On Wednesday, there was a strong performance from this pair touching a high of 114.54 but yesterday, after seeing a print at 114.55, there was heavy selling which closed well past the halfway point of the previous day. This is known as Dark Cloud Cover, a decent reversal signal. It is currently trading circa 113.85 and a close here or lower would also provide a shooting star on the weekly chart. The key support for the Bulls to defend comes in at 113.40 and will be an important level to watch. A close below 113.71 today would also see a breach of the trend support in place since the beginning of September.
Gold Weekly Recap