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August Comex Gold futures are trading lower for the week after posting a potentially bullish closing price reversal bottom last week. There has been no follow-through to the upside so the chart pattern has not been confirmed.
Gains are likely being limited by the soaring U.S. Dollar which is hurting demand for the dollar-denominated asset. However, gold is getting plenty of support from the fundamental side of the equation. Geopolitical issues include worries over a U.S.-China trade war, the on, off, maybe on meeting between the U.S. and North Korea, a tanking Euro and political turmoil in Italy and Spain.
Weekly Technical Analysis
The main trend is down according to the weekly swing chart. However, last week’s closing price reversal bottom signaled a shift in momentum to the upside.
A trade through $1275.90 will confirm the closing price reversal bottom. This could fuel the start of a 2 to 3 week counter-trend rally.
A move through $1286.80 will negate the reversal bottom and signal a resumption of the downtrend.
The main range is $1251.90 to $1379.30. The market is currently straddling the bottom of its retracement zone at $1315.60 to $1300.60. This zone is controlling the longer-term direction of the market.
The short-term range is $1375.10 to $1286.80. If the closing price reversal bottom is confirmed, we could see a rally into its retracement zone at $1331.00 to $1341.40.
Weekly Technical Forecast
Based on the early price action, the direction of the August Comex Gold market the rest of the week is likely to be determined by trader reaction to the Fibonacci/uptrending Gann angle support cluster at $1300.60 to $1299.90.
Holding above $1300.60 will signal the presence of buyers. If this creates enough upside momentum then look for the rally to extend into the 50% level at $1315.60, followed by the steep downtrending Gann angle at $1319.10.
The trigger point for an acceleration to the upside is the downtrending Gann angle at $1319.10. This could lead to a rally into $1331.00.
A sustained move under $1299.90 will indicate the presence of sellers. This could trigger a retest of $1286.80. If this price level fails then look for the selling to extend into the next uptrending Gann angle at $1275.90.
This article was originally posted on FX Empire