End of Week Report 7 Dec

Gold Weekly Recap
Gold made a strong start to this week closing above two constitutive resistance levels, 1230 on Monday and 1238 on Tuesday. This was good news for the Bulls, recovering from last week’s test of the 1214 support area. The second of these resistance levels, the 1238 Fibonacci Retracement of the move down since last April was the more important achievement from a technical perspective. This remain relevant as the market continued trade around this area despite having posted a high yesterday up at 1244 however, there has been some further buying in early trading today.

Gold the Week Ahead
Despite the pullback from yesterday's 1244 high, the Bulls remain in control. Closing above the 1238 Fib level on Tuesday was the first positive. Yesterday's high at 1244 was also important in terms of Dow Theory. This has confirmed a pattern of higher highs and higher lows on each swing of the market. 1244 is also one pip higher than the last major failure seen on 26th October. To the upside, the next light resistance comes in at 1248 with the stronger level up at 1266. In the other direction, 1230 now reverts to the support column.

Currencies
GBPUSD continues to be in focus as the UK Parliament’s Brexit vote looms next week. Tuesday saw the Bears take on the 1.2661 support posting a low of 1.2658, before the Bulls acted to stage a recovery. The breach of this important support was too marginal to trigger sizeable stop activity, allowing for the bounce to occur. Both Tuesday and Wednesday produced similar candles known as a Rickshaw Man. These are similar to a Doji where the market opens and closes circa the same level. The difference is the Rickshaw Man has a bigger range, producing longer shadows, or wicks. This pattern is more a sign of indecision but occasionally may identify a change in control. A close around current levels today could produce the same type of candle on the weekly chart below.

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