Versus the US dollar, spot gold (XAU/USD) rallied strongly in the early hours of the US session and is now up 1.5% on the day. Currently trading at US$2,977 and refreshing record highs, the precious metal is on the cusp of bumping heads with the widely watched US$3,000 level.
Gold’s Uptrend Remains Intact
Although Gold’s multi-year uptrend is not ensured to continue, from a technical perspective, the trend remains unbroken until demonstrated otherwise. And, right now, buyers are certainly in the driving seat. Some analysts use moving averages to indicate a trend change, while others use technical indicators; I prefer good old-fashioned price action to help validate a trend reversal, and I have seen limited evidence thus far.
Bulls Targeting US$3,000?
The daily chart shows that price action is fast approaching the US$3,000 barrier, with a 1.272% Fibonacci projection ratio circling just above at US$3,002. While this Fibonacci projection ratio is essentially an ‘alternate’ AB=CD bearish structure, I tend only to consider these patterns in downtrends, employing them to help confirm and fade a pullback. However, that is not to say that they cannot be used as profit objectives/potential resistance levels in uptrends. Consequently, given possible negative divergence from the Relative Strength Index, the US$3,000 area could prompt profit-taking.
With the above in mind, until the yellow metal reaches US$3,000, this could open the door to short-term bullish scenarios. The H1 decision point area at US$2,966-US$2,971 is a zone I will watch closely for bulls to make a show from in the event price tests this space. Interestingly, this base is accompanied by a H1 channel resistance-turned potential resistance, extended from the high of US$2,922.
Written by FP Markets Market Analyst Aaron Hill
Gold’s Uptrend Remains Intact
Although Gold’s multi-year uptrend is not ensured to continue, from a technical perspective, the trend remains unbroken until demonstrated otherwise. And, right now, buyers are certainly in the driving seat. Some analysts use moving averages to indicate a trend change, while others use technical indicators; I prefer good old-fashioned price action to help validate a trend reversal, and I have seen limited evidence thus far.
Bulls Targeting US$3,000?
The daily chart shows that price action is fast approaching the US$3,000 barrier, with a 1.272% Fibonacci projection ratio circling just above at US$3,002. While this Fibonacci projection ratio is essentially an ‘alternate’ AB=CD bearish structure, I tend only to consider these patterns in downtrends, employing them to help confirm and fade a pullback. However, that is not to say that they cannot be used as profit objectives/potential resistance levels in uptrends. Consequently, given possible negative divergence from the Relative Strength Index, the US$3,000 area could prompt profit-taking.
With the above in mind, until the yellow metal reaches US$3,000, this could open the door to short-term bullish scenarios. The H1 decision point area at US$2,966-US$2,971 is a zone I will watch closely for bulls to make a show from in the event price tests this space. Interestingly, this base is accompanied by a H1 channel resistance-turned potential resistance, extended from the high of US$2,922.
Written by FP Markets Market Analyst Aaron Hill
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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.
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.