Can Gold Break Out Of This Wedge?
Last week, Gold showed some great strength and finished higher on the week after bouncing off some good trendline support, and this week we have seen the market selling off back towards the low of last week right near 1940. Gold is trading in this range now, and it seems the bears are in control for the time being as there is not a strong fundamental reason for the prices to go higher. There are several outside factors contributing to the downward pressure in Gold that we are seeing this week.
For one, the dollar has had continued strength and has been trading significantly higher, putting pressure on the market. Also, there is a lack of momentum to the upside when we have seen moves higher, and there has been strong selling pressure from key resistance levels.
So what does this mean for Gold, and where can we go from here...?
Looking at the chart, December Gold is trading in this wedge, and the wedge is getting tighter, indicating we may see a breakout higher or lower. As we have been in this downtrend since the May highs, Gold would need to have a strong catalyst and to get us out above that trendline resistance, which also lines up with the .618 retracement level.
With that said, we have held key support levels near 1940, and there is strong trendline support going back to December. If the market can hold above this trendline support, and we see the dollar come off its highs and treasury yields come back in, that could be what the market has been waiting for to bounce and have an upside breakout.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
For one, the dollar has had continued strength and has been trading significantly higher, putting pressure on the market. Also, there is a lack of momentum to the upside when we have seen moves higher, and there has been strong selling pressure from key resistance levels.
So what does this mean for Gold, and where can we go from here...?
Looking at the chart, December Gold is trading in this wedge, and the wedge is getting tighter, indicating we may see a breakout higher or lower. As we have been in this downtrend since the May highs, Gold would need to have a strong catalyst and to get us out above that trendline resistance, which also lines up with the .618 retracement level.
With that said, we have held key support levels near 1940, and there is strong trendline support going back to December. If the market can hold above this trendline support, and we see the dollar come off its highs and treasury yields come back in, that could be what the market has been waiting for to bounce and have an upside breakout.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.