XULF Report
Gold finally reclaimed some its losses yesterday as the economic calendar was void of any market moving data giving gold a breather from the bear attack. Chicago Fed President Charles Evans commented on the improving economic conditions in the US offering further clues regarding the Fed’s plans to slowdown the stimulus but this didn’t have the usual negative impact on gold.
The 1 hour chart shows a possible swing trade opportunity amid conflicting data. Although given the strong retracement pushing the RSI above 70 whilst the fundamentals are still very much bearish the short play is probably favourable today. However any short trades should exercise disciplined risk management because the 20 period and 50 period MA gives a signal to the contrary. The two hammers side by side indicates an incline of a few dollars could occur before we see a triple top and the bear trend resume. If the crossover of the moving averages are correct price could force itself through $1400 resistance but will unlikely be able to extend a rally of the magnitude we saw yesterday. If price can push below today’s low of $1382 then $1370 is the target for the next 48 hours otherwise we may see some range bound trading between $1382 and $1400.
Be mindful that yesterday’s candlestick on the daily chart was strong bullish which provides more conflicting data therefore trade carefully.
Again we have light scheduled economic data today but make sure you put Fed Chairman Ben Bernanke’s testimony in your diary at 10pm tomorrow.
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