Gold is consolidating around the $1090/oz level after its impressive topside breakout earlier this week. Investors are monitoring the Dollar as the markets digest today’s monetary policy decisions from the ECB and BoE while contemplating a test of the psychological $1100/oz level. Regardless, this week’s breakout was a sign of strong support for gold’s uptrend since the precious metal moved without full participation from the Dollar. However, the sustainability of gold’s new near-term uptrend will likely depend upon a broad-based devaluation in the Dollar since the two are negatively correlated. Hence, investors should keep a sharp on the interaction of gold’s correlations with tier respective topside technicals, most notably the EUR/USD and AUD/USD.
Technically speaking, we’re at a loss of downtrend lines and historical perspective again. Therefore, the psychological $1100/oz level serves as our only trustworthy topside technical for the time being. Speaking of which, gold stopped just short of $1100/oz, hinting that the level could have a near-term psychological impact on investors. As for the downside, we’ve readjusted our uptrend lines, giving us an idea of support. Gold has 11/05 and 11/04 lows serving as technical cushions along with our new 3rd tier uptrend line and the psychological $1075/oz level.
Present Price: $1091.30/oz
Resistances: $1091.49/oz, $1092.77/oz, $1095.77/oz, $1100.04/oz
Supports: $1087.85/oz, $1085.28/oz, $1083.14/oz, $1079.93/oz, $1075.01/oz, $1069.89
Psychological: $1100/oz, $1075/oz.
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