Gold critical update (Jun 9)
Dear traders,
I'm updating a bit more frequently on gold lately, because I see gold is at a critical junction. How this resolve will determine where we will go for the coming weeks or months.
At this point, this is a very bearish game at least for near term. a few scenarios can still play out for bulls. So I will be shorting with care, and be prepared to switch.
As mentioned in my yesterday's analysis, gold must break above and hold 1901. We had instead a massive spike to just below 1904. (a perfect resistance to short).
(I'm using lower TF just to show a clearer pattern with more resolution)
- We are seeing head & shoulder patterns across the price structure.
- closing below 1870 will confirm a bigger head & shoulder pattern
- closing below 1892 will confirm the near term head & shoulder pattern.
1896 shows us it's a great resistance. It's not likely to break this level in any time soon.
HOWEVER, 1892 is also surprising resilient.
Perhaps we will range between 92-96 for a bit before we see any further move.
question:
- how bearish will this become?
Key price level: 1880, 1868-70, and 1855.
- necklines: 1880 is the neckline for the near term H&S pattern
- neckline: 1855 is the neckline for a longer term H&S pattern.
- 1868-70 is a strong support region. It's also now intersecting with the bullish uptrend line.
- If bears manage to smash through all these levels, we might have printed the top, and more lows will follow.
- If bulls can hold above 1855, there's still a chance to blast to 1959.
- I'm not expert in EW analysis, but with limited understanding, I do see this drop as a wave 4, with wave 5 aiming at 1959.
USD news:
- US trade balance data is largely within target. So, this is bullish for DXY.
- If we continue to see more bullish news for DXY, chances are we will see much higher dollar price.
- It also makes fundamental sense. USA's economy is performing much better than many countries around. Long dollar will be the sentiment for the near term future.
- FOMC might change things a bit, but comparing history and what Yellen is saying now, i will not be surprised to see rate hike soon.
- Rate hike does not equal market crash. at least it wont happen immediately. You can cross check US10Y chart with SPX, and you will not be able to see an immediate effect.
P.S. I personally like to see 1959. This will repeat the exact topping pattern we saw in 2011-2012.
But personal bias aside, we trade what we see. right now, this is bearish.
Trade safe, and manage risks according to key price levels.
Good luck all.
I'm updating a bit more frequently on gold lately, because I see gold is at a critical junction. How this resolve will determine where we will go for the coming weeks or months.
At this point, this is a very bearish game at least for near term. a few scenarios can still play out for bulls. So I will be shorting with care, and be prepared to switch.
As mentioned in my yesterday's analysis, gold must break above and hold 1901. We had instead a massive spike to just below 1904. (a perfect resistance to short).
(I'm using lower TF just to show a clearer pattern with more resolution)
- We are seeing head & shoulder patterns across the price structure.
- closing below 1870 will confirm a bigger head & shoulder pattern
- closing below 1892 will confirm the near term head & shoulder pattern.
1896 shows us it's a great resistance. It's not likely to break this level in any time soon.
HOWEVER, 1892 is also surprising resilient.
Perhaps we will range between 92-96 for a bit before we see any further move.
question:
- how bearish will this become?
Key price level: 1880, 1868-70, and 1855.
- necklines: 1880 is the neckline for the near term H&S pattern
- neckline: 1855 is the neckline for a longer term H&S pattern.
- 1868-70 is a strong support region. It's also now intersecting with the bullish uptrend line.
- If bears manage to smash through all these levels, we might have printed the top, and more lows will follow.
- If bulls can hold above 1855, there's still a chance to blast to 1959.
- I'm not expert in EW analysis, but with limited understanding, I do see this drop as a wave 4, with wave 5 aiming at 1959.
USD news:
- US trade balance data is largely within target. So, this is bullish for DXY.
- If we continue to see more bullish news for DXY, chances are we will see much higher dollar price.
- It also makes fundamental sense. USA's economy is performing much better than many countries around. Long dollar will be the sentiment for the near term future.
- FOMC might change things a bit, but comparing history and what Yellen is saying now, i will not be surprised to see rate hike soon.
- Rate hike does not equal market crash. at least it wont happen immediately. You can cross check US10Y chart with SPX, and you will not be able to see an immediate effect.
P.S. I personally like to see 1959. This will repeat the exact topping pattern we saw in 2011-2012.
But personal bias aside, we trade what we see. right now, this is bearish.
Trade safe, and manage risks according to key price levels.
Good luck all.
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