XULF Report
Gold’s bounce continued yesterday supported by manufacturing data from Europe, Great Britain and the US helping it reach $1262 which was the long target level yesterday in my Weekly Gold Report. Italy and Spain showed refreshing improvements in their manufacturing sector signalling Europe could be slowly turning a corner and this benefitted commodity price across the board.
In Monday’s Weekly Gold Report I focused on the 4 hour chart to discover where this bounce would find resistance. Price crossing up through the Ichimoku Kijun Sen line was a bullish signal but as expected the 38.2% Fib Retracement level at $1261 has provided resistance. As I write price is testing for a second time so short term the market is kind of at a crossroads deciding on whether to break or bounce again. Any bearish candlesticks around resistance $1261/62 is a good time to sell with low risk and on the contrary long bodied bullish candlesticks which have penetrated this level will be a good time to buy. On a break price could have a rally but be aware it will likely find some resistance as price intersects with the Ichimoku clouds.
Economic data today is rather light but it’s worth being mindful of the Spanish Unemployment Change 08:00 GMT, UK Construction PMI at 09:30 GMT and US Factory Orders at 15:00 GMT especially now after yesterday’s positive data as the market will be examining data even closer.
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