Posts
Draghi’s dovish comments from earlier today have led to out-and-out rout in the euro, with the single currency falling over 200 pips against the US dollar and even further against previously beaten-down currencies like the New Zealand dollar. With the prospect of a further easing from one of the world’s most important central banks, you would expect to see strength in commodities like oil, gold and other metals, but the accompanying dollar strength appears to be overwhelming this effect.
Despite a modicum of weakness today, gold’s technical outlook remains optimistic in the near-term. After peaking near 1190 last week, gold has nudged its way back down to 1165 as of writing. The shallow, controlled pullback after the big rally of the previous days has created a clear bullish flag pattern. It’s worth noting that, despite its name, this pattern is only seen as a bullish sign if we see a breakout above the top of the flag (currently near 1180).
That said, the secondary indicators suggest that we could see a bullish breakout sooner rather than later. The MACD continues to trend higher above its signal line and the “0” level, showing bullish momentum despite the recent dip. Meanwhile, the RSI indicator is in an uptrend of its own and has pulled back from overbought territory, potentially clearing the way for another leg higher.
Looking ahead, a break above the top of the flag at 1180 could open the door for a move up to 1200 next, and the measured move target of the pattern actually comes up closer to the 1250 level. Bulls would do well to temper their enthusiasm for now though, as a failure to break out of the bullish flag pattern could lead to a deeper retracement toward the 100-day MA in the 1140 zone.
You can find more of FOREX.com’s research at http://www.forex.com/latest-forex-research.html
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that FOREX.com is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Conduct Authority (FCA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, and the Financial Services Agency (FSA) in Japan. Please read Characteristics and Risks of Standardized Options.
0 comments:
Post a Comment