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    Technical Analysis – Gold strongly bearish despite upside attempts

    Gold was attempting to make a second day of gains on Tuesday but was struggling to stay in positive territory. It hit 3-month low of 1085.35 last Friday and has now retraced more than 61.8% of the July 20-October 15 rally.

    RSI and the stochastics have reversed into negative territory in the hourly charts and remain strongly bearish in the daily charts, indicating on-going downside momentum in the near-term. However, some further upside momentum is possible given that the stochastics are still in oversold ground.

    The longer-term picture is not looking any better as prices remain below the 200-day moving average and below the Ichimoku cloud. A break below the key support level of 1071.19 – the July 20 low – would push gold back onto a downtrend. On the upside, the 61.8% of the Fibonacci retracement level at 1117 is the nearest resistance level that gold needs to overcome to shift the bias to a more neutral one.

    Risk Warning: Forex, Commodities, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you fully understand the risks involved and do not invest money you cannot afford to lose. Please refer to our full Risk Disclosure.


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