Gold Price Futures (GC) Technical Analysis – Closing Price Reversal Top Could Trigger 2 – 3 Day Break
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Gold futures finished lower on Tuesday in reaction to a solid reversal by the U.S. Dollar. The move was fueled by the easing of tensions between China and the U.S. over recently imposed tariffs and a report that the two nations will try to negotiate major changes to trade policy.
June Comex Gold futures settled at $1347.90, down $13.00 or -0.96%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, Tuesday’s closing price reversal top suggests momentum may be shifting to the downside. A trade through $1345.50 will confirm the chart pattern. This could lead to a 2 to 3 day correction, but not necessarily a change in trend.
A trade through $1362.80 will negate the closing price reversal top and signal a resumption of the uptrend with tops at $1369.60 and $1375.50 the next major upside targets.
The main range is $1375.50 to $1309.30. Its retracement zone is $1350.20 to $1342.40. Besides the swing chart, this zone is also controlling the direction of the gold market.
The short-term range is $1312.40 to $1362.60. Its retracement zone at $1337.50 to $1331.60 is the primary downside target. Since the main trend is up, buyers are likely to come in on a test of this zone.
Daily Swing Chart Technical Forecast
Based on the close at $1347.90, the direction of the gold market early Wednesday is likely to be determined by trader reaction to the main Fibonacci level at $1350.20.
A sustained move over $1350.20 will indicate the presence of buyers. If this move generates enough upside momentum then look for a possible retest of $1362.60. This is a possible trigger point for an extension into $1369.60 then $1375.50.
A sustained move under $1350.20 will signal the presence of sellers. Taking out $1345.50 will confirm the reversal top and likely fuel a further decline into $1342.40 then $1337.50 to $1331.60.
A test of $1337.50 to $1331.60 could attract buyers, but if $1331.60 fails as support then look out to the downside with major support not coming in until $1312.40 to $1311.40.
This article was originally posted on FX Empire