As we talked about the gold market yesterday, the intraday resistance for gold is at 1306-1308. And we mentioned that if that resistance can’t hold, the up swing might continue to 1315. What happened yesterday was that gold was trying to break above that resistance point. It traded as high as 1310 but then closed the day around 1308. Today, price has corrected a little bit to 1304-1306 so our resistance seems to hold as of the moment.
Looking at the 1-hour chart, like we said yesterday gold is trading inside a channel that looks like a bear flag. Now price is finding support at 1304-1306 which lies at the lower support trend line of that channel. There are double divergences on both MACD and RSI indicators. These double divergences are strong indicators of reversal. If channel support at 1304-1306 can’t hold, price will find lower supports at 1297 or 1292.
The FOMC minutes came out yesterday showed that most participants expect rate to remain unchanged for 2019 while market’s expectation is one rate-cut this year. The participants also analyzed recent market conditions, especially the US Bond yields inversion, but they concluded that they do not see any incoming recession in the US. Meanwhile the UK and EU has just agreed to delay Brexit until October 31st. These fundamental news support risk-on sentiment which is bearish for gold.
The daily gold chart shows that price has reached downward trend line acting as daily resistance. Moreover, by looking left on the chart we can see clearly daily resistances and daily supports. First daily resistance is around 1310-1312, which coincides with downward trend line. If price breaks above 1310-1312, the next resistance is seen at recent top at 1325. Our daily support is at 1280-1284.
We feel that price has reached its daily and intraday resistances so price can turn down a little bit to 1297 or 1292. However, if price breaks above daily resistance at 1310-1312, it will continue up to 1325.
GOLDTREND.NET