XM Group - Analytics

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    Technical Analysis – Gold at 3-month highs but overbought

    Gold has marked a three-month high on Tuesday, peaking at 1130.93.

    Gold has successfully moved above the 100-day moving average and has had a daily close above the 50% Fibonacci for the past two days. This 50% Fibonacci level at 1118.80 is the retracement of the downleg from 1191.47 to 1046.29. (October 2015 to December 2016 decline).

    Prices are currently capped by the 200-day moving average which is providing resistance at 1128.45. The stochastic is in overbought territory which suggests some consolidation in the near term or a pull back in prices towards support at the 50% Fibo. A break of this support would target the next support at the 100-day moving average and 38.2% Fibo.

    For the current bullish run to continue, a break above the 61.8% Fibo (1135.77) is needed.

    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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