Gold has gained an important ally, but is it enough to go higher?
If we looked at the daily chart, we will see that the U.S. currency moved a bit above the previously day and also the 200-day moving average during Wednesday (05 June)’s session, this improvement turned out to be quite temporary and the greenback finished the day below these resistances, invalidating the earlier breakout.
This negative development lured the bears earlier on Thursday (06 June), which resulted in a test of Wednesday’s green candle (104.05-104.15). As we can see, this very short-term support withstood the selling pressure, which translated into a reversal and a rebound in the following hours.
Due to Thursday’s upswing, the greenback came back above the mentioned resistances, which is a positive sign.
CCI and the Stochastic Oscillator Generated Buy Signals For US Dollar
CCI and the Stochastic Oscillator generated buy signals, suggesting that further improvement may be just around the corner.
This might be especially true if the U.S. dollar manages to finish today’s session above the resistances level around 104.05-104.15.
Technicals For Gold - Upswing
Thanks to Wednesday’s upswing, the buyers gained an important ally – a bullish engulfing candlestick pattern (marked with the green rectangle on the above chart), which would serve as the nearest support.
This positive development encouraged the bulls to act before today’s U.S. market open, which resulted in a move above the upper border of the orange consolidation, the upper line of the very short-term grey rising channel.
Gold futures tested the upper line of the red gap ($2,383-$2392.90) from 23 May, but the combination of these key and very short-term resistances, it actually encouraged the bears to come back.
So we might see the futures reversed and pulled back, invalidating the earlier small breakout above the grey area. This does not bode well for the bulls for further improvement.
But we need to take note of the BUY signal generated by the Stochastic Oscillator, this should give buyers the reason to act now or sooner.
But I personally feel that we need to see another breakout so that we can confidently feel that Gold wold be moving in a rally.
How Do We Trade Then?
I would think it is time to look at the $SPDR Gold Shares(GLD)$ , we saw a BUY signal from KDJ, similar to what we have seen on the Gold Futures, we should be looking at around $218 to $218.50, as I expect a slight dip for us to buy into GLD.
This should be a good time and opportunities to buy as the interest rates decision should be coming soon, and increase in jobless claims yesterday might trigger Fed to rethink whether the economy might not be performing as it should be.
Summary
Gold futures moved higher earlier on Thursday (06 June), the combination of the key resistances stopped further improvement, triggering a pullback and an invalidation of the earlier small breakout.
While such price action does not bode well for the bulls, suggesting that further deterioration may be just around the corner. We could still take advantage by investing in GLD.
Appreciate if you could share your thoughts in the comment section whether you think Gold would break through its key resistance to go higher?
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Comments