End of Week Report 19 Oct

Gold Weekly Recap Last week, Gold finally broke out of the 1182-1214 range, passing through the resistance last Thursday. There was light selling last Friday, but 1214, which has now switched to the support column, was never under threat. On Monday, Gold staged a decent rally providing this week’s high to date at 1233. Since then, the daily ranges have been decreasing but has established that Gold is in a new range between the 1214 support and the important 1238 Fibonacci resistance.

Gold the Week Ahead As above, 1214 is now in the support column and there is strong resistance at 1238. This is the 38.2 Fibonacci retracement of the move down that began last April. Many technicians perceive this as just a healthy bounce and nothing more. Others believe it is the first stalling point on the first leg of the new uptrend. Either way, there is no doubt that it is often difficult to breach. It should be noted that this week’s trading has centred around a heavy work area from July (circled on the chart.) Going into next week, it looks possible that the 1214-1238 range will continue, but it requires monitoring for a potential pennant formation that could provide another boost.

Currencies
GBP has had difficulty against USD over recent weeks. There has been heavy selling from mid-April until mid-August, followed by a bounce but once again, the 38.2 Fibonacci level came into play. This is at 1.3319 and the closest it came to this point was the week of 16th September, posting a high at 1.3298. Since then any rally has been short-lived leaving upper shadows on the weekly candles. This suggests there may be more selling over the coming couple of weeks. Should this happen, then the first support of note comes in at 1.2921.

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