XM Group - Analytics

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    Technical Analysis – Gold surges past 1150; outlook mixed

    Gold prices rallied on Friday to rise above 1150 to a two-week high as bullion took advantage of a weakened outlook for the dollar. Prices have risen above the Ichimoku cloud but remain well below the 200-day moving average and within the narrowing trading range that’s been forming since July, giving a somewhat mixed outlook for the medium term.

    The 61.8% of the Fibonacci retracement level of the May-July downleg is the key resistance level at 1170.50 that gold needs to overcome to strengthen the upside momentum for a push above the 200-day moving average. To the downside, the 38.2% of the Fibonacci retracement level at 1132.50 acts as a support level that would keep prices above the cloud.

    Looking at the intra-day chart, the upside bias is weakening as both the RSI and the stochastics are falling, though they remain in comfortably in bull territory.

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