Gold Stalls at a Resistance Zone Yet Remains Strong, Near the Highs of the Advance
Gold Forecast Video for 01.09.23 by Bruce Powers
Gold further tests resistance around the 61.8 Fibonacci retracement at 1,948 and the downtrend line. So far it is holding up and consolidating near the rally highs. Today’s price action is contained within yesterday’s trading range with a high providing a rest to the advance. A trend high of 1,949 was hit yesterday completing the Fibonacci retracement.
Short Term Weakness in Today’s Price Action
Although an inside day within a clear uptrend can lead to an upside continuation upon a breakout, today’s price action is showing signs of short-term weakness. Notice that an inverse hammer candlestick pattern has formed, and natural gas is set to close weak, in the lower half of the day’s range. This might lead to a deeper pullback.
Dynamic Support Around the 34-Day EMA and Short Uptrend Line
Today’s high is 1,948 and the low is 1,939. A drop below today’s low is short term bearish. Yesterday’s low around 1,935 may then be tested as support and if it fails lead a deeper retracement. The area around the 34-Day EMA (1,927) would first be targeted if support at yesterday’s low fails to reverse a pullback. Notice that the 34-Day line is approaching the internal uptrend line. Each line will represent approximately the same price area tomorrow. Earlier in the week natural gas rose back above the 34-Day line. However, since then it has not yet been tested as support. So, it wouldn’t be surprising for that to occur.
The uptrend line is short term, but four daily lows confirm it. This makes it potentially a more significant support area than it might otherwise be. Even more so when combined with the 34-Day line. It is mentioned as starting next week potential support represented by the trendline will start moving above the 34-Day EMA. Subsequently, a test of the 34-Day line might break below the uptrend line.
Decisive Rally Above 1,948 Opens Door to Higher Targets
For the upside, a decisive rally above today’s high increases the chance for a break above yesterday’s high of 1,949. That would open the possibility for a continuation higher in the short term. If it can then keep rising the next higher target is around the 78.6% retracement at 1,965 and the weekly high of 1,972.
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