December Comex Gold futures are trading lower after the European Central Bank made its monetary policy announcement. The ECB unveiled a plan to cut its
December Comex Gold futures are trading lower after the European Central Bank made its monetary policy announcement. The ECB unveiled a plan to cut its bond-buying program and extend it to at least September 2018.
Apparently, Euro traders didn’t like the news because the single-currency retreated initially. This drove up the U.S. Dollar index which put pressure on dollar-denominated gold.
The main trend is up according to the daily swing chart. A trade through $1292.90 will change the main trend to up.
A move through $1272.00 will signal a resumption of the downtrend with the main bottom at $1262.80 the next downside target.
The main range is $1262.80 to $1308.40. Its retracement zone at $1280.20 to $1285.60 is resistance. This range stopped the rally on Wednesday at $1283.80. This is followed by the major 50% level at $1286.80.
The major Fibonacci level at $1268.90 is support.
Based on the current price at $1276.10 and the earlier price action, the direction of the gold market the rest of the session will be determined by trader reaction to the pair of Gann angles at $1276.40 and $1276.80.
A sustained move under $1276.80 will indicate the selling is getting stronger. This could trigger a further decline into the closing price reversal bottom at $1272.00. This is followed by an uptrending Gann angle at $1269.80 and the Fibonacci level at $1268.90. The latter is the last potential support before the $1262.80 main bottom.
A sustained move over $1276.80 will signal the return of buyers. If the move picks up traction then look for the intraday rally to extend into $1280.20. Overcoming this Fibonacci level will indicate the buying is getting stronger with the next target a pair of 50% levels at $1285.60 and $1286.80.
Basically, look for a bullish tone to develop on a sustained move over $1276.80 and for the bearish bias to continue on a sustained move under $1276.40.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.