This is the daily chart of Gold. The impressive rally has stalled at the median line of a larger multi-month fork (not entirely visible here). We've made several tests of this line before, and the chart seems to respect this angle. Therefore, some test of support should be expected.
I'm more cautious than usual, given that we're losing momentum on the Stoch/RSI, and the rally is overdue some digestion.
The immediate weekly horizontal support (purple) starts at around 1307 area, then moves down to 1302, and below there, the 1290s. The low 1300s is the yearly open, so I would expect his to hold on a closing basis if Gold is to maintain a bullish immediate posture. Should that hold, Gold could easily crawl up to long-term resistance at the 1350s.
For now, we're in a holding pattern. The last 2 trading days have developed a wedge. Small wedges like this are rarely clean in Gold, and can be violated both ways.
I've taken this opportunity to reduce my underwater short position at breakeven - it has been a humbling mistake, not to be repeated. I'm still net short, awaiting a signal.
I'll be a buyer of Gold if it falls to test the low 1300s. My position will be full size. Though my profitability will be reduced, the long would soon eclipse the short.
I will also long Gold on a shorter time frame with a smaller position and wider stop, if it breaks up from the wedge. My position will be equal to my short position so I'll be flat. I'll then add long on dips.
Bullish, but caution advised.
I'm more cautious than usual, given that we're losing momentum on the Stoch/RSI, and the rally is overdue some digestion.
The immediate weekly horizontal support (purple) starts at around 1307 area, then moves down to 1302, and below there, the 1290s. The low 1300s is the yearly open, so I would expect his to hold on a closing basis if Gold is to maintain a bullish immediate posture. Should that hold, Gold could easily crawl up to long-term resistance at the 1350s.
For now, we're in a holding pattern. The last 2 trading days have developed a wedge. Small wedges like this are rarely clean in Gold, and can be violated both ways.
I've taken this opportunity to reduce my underwater short position at breakeven - it has been a humbling mistake, not to be repeated. I'm still net short, awaiting a signal.
I'll be a buyer of Gold if it falls to test the low 1300s. My position will be full size. Though my profitability will be reduced, the long would soon eclipse the short.
I will also long Gold on a shorter time frame with a smaller position and wider stop, if it breaks up from the wedge. My position will be equal to my short position so I'll be flat. I'll then add long on dips.
Bullish, but caution advised.