XULF Report
For the most part of yesterday gold was establishing a new range between $1438 and $1426 struggling to breakout of the triangle that was forming by the convergence of price moves. A rebound in US Retail Sales for April failed to shift gold out of this range which suggests the bears are waiting for a pullback before entering the market again.
This morning price has spiked up forcing itself through the upper side of the triangle illustrated by this 1 hour chart although the fundamentals do not seem sufficiently supportive to help instigate a strong rally therefore be patient and wait for another shorting opportunity
The 4 hour chart indicates now may be a good time to short the market as price is making contact with another bearish trendline which is likely to be stronger than the 1 hour. Look to short the market around this trendline at $1441 to $1445 even if price breaks it because it’s likely to be a false break. Also bear in mind the 20 period MA has recently crossed below the 100 period MA signalling another downward leg might occur. In addition this morning’s spike has pushed the RSI over 70 on the 15 minute giving another signal of an impending reversal and a resume of the bearish trend.
The main economic release to watch out for today is the German ZEW survey which shows investors feelings about the state of the German economy which could deliver some surprises.
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