Forex Video Briefing (11/5) – Next Target for Gold
After the FOMC announced the end of QE, gold fell sharply, but consolidated around 1170 to start this week. After a few sessions of tight consolidation, gold started to fall again during the 11/5 session. In the near-term, gold might be oversold as it tags 1140. The RSI is oversold and showing a bullish divergence. If we see a pullback, watch out for resistance as price approaches the 1170 area. A break above 1180 however ,would suggest a period of consolidation/bullish correction. At that point, look for resistance around 1200.
If gold indeed maintains the current bearish trend, which is the more likely scenario in the short to medium term (possibly rest of the year), where would we expect it to find support? Looking at the weekly chart, we can see that there is a support/resistance pivot area roughly between 1000 and 1045. If the weekly RSI comes down to 20 while price approaches this area, we should start looking for support.