Stock Market

Gold within Neutral Rectangle but remains heavily pressured for TVC:GOLD by goldenBear88

Gold’s general commentary: The inability to break below #MA50 on Daily chart caused another pullback which pushed the Price-action just above the middle of Bollinger Bands (the range was #1,940.80 – #1,960.80 on Spot prices). It is important to note that Gold was Trading on obvious Dead Cat bounce which should deliver deeper Bearish values, but Fundamental Buying pressure from both DX Selling rally and Bond Yields Bearish Gap fill prevailed. As market approaches important macro-economic releases, this range will most likely break (once the market picks a side), and depending on the DX numbers, Gold will Trade with negative correlation. Daily chart turned Bearish sessions ago (and when that happens since December’s fractal ), market always delivers Medium-term Selling opportunity. As discussed before, as long as #1,942.80 – #1,938.80 Support zone holds, expect Buyers to arise and push the Price-action within #1,951.80 – #1,962.80 Resistance belt. If however #1,942.80 breaks, Gold resumes the Selling trend towards #1,931.80 first, then #1,917.80 (multi-Month Resistance zone ). Since current sentiment may inflict High volatility , it would be best to wait for today’s Daily candle closing before taking any action. Gold has so far failed to close a Daily candle above the #1,961.80 symmetrical Resistance but Technically remains critically Bearish . In order however to extend recovery candles, candle needs to be closed above the #1,961.80 pivot pressure point and if it does, the Natural Targets would be first #1,972.80 and if a Daily candle closes once again above it, then #1,988.80 in extension. On the other hand, if a Daily candle closes below the #1,961.80 Short-term Resistance zone , I would expect a Technical pullback to its Medium-term Support, the Daily chart’s #MA50. Medium-term though I remain Bearish as within the next sessions I expect further meltdown on Gold and full oscillation towards #1,900’s level. I still believe that there is more downside potential on Gold .

Technical analysis: Gold almost hit the #1,938.80 benchmark and pulled back, not only due to #1,938.80 representing strong Support (see how it held strongly on April #10, April #11 and April #20) but also due today’s parallel recovery on the Bond Yields (inverse correlation) and DX on Buying rally, arising Buyers on every local Low’s. I have a similar sequence lately. Wednesday’s U.S. session Daily chart’s candle tested the Lower High’s Upper extension for the first time since early April’s configuration, but market closed below it, then yesterday’s session Daily chart candle even though it opened with a new Low, again closed below the Daily chart’s Lower High’s (was then) extension, and today’s session candle is comfortably Trading below it with it’s Low exactly on the #1,942.80 extension / which supports my outlook that Trading would be performed near #1,917.80 extension if there wasn’t Buying pressure from (then) DX on decline and Bond Yields taking strong hits. Current sequence resembles the standard Support pricing patterns. Daily chart is Bearish and almost near the Lower barrier of the Neutral Rectangle , so still a valid Selling entry exists only if #1,940.80 breaks. I formulate my Short-term approach based on the Hourly 4 chart where Price-action is giving Selling signals, while I expect aggressive decline once the Fundamental pressure eases.

My position: Even though it is not my usual practise, I have been holding my Selling order (#1,943.80 representing entry point) for more than #2 sessions, expecting Selling sequence on Gold . However, throughout yesterday’s session, as position didn’t brought any benefits, I decided to close it near the breakeven values and observe the Price-action from sidelines. I got my capital ready and on stand-by to utilize Selling sequence which might be ahead. If #1,940.80 – #1,938.80 breaks, I will engage my Selling order towards #1,900.80 psychological barrier. Market closing below #1,952.80 adds credence to Sellers.

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