Gold has had a choppy end to November. After a false bearish continuation swing (which broke November’s structure), gold shot up to 1220. This shows that the market could be bottoming above the current low on the year at 1130.
Drifting Low: After hitting 1220, it has been drifting back. Gold started the week below 1200, but is now starting the 12/9 session pushing above the 1200 level. However, we can see the market holding price below December’s falling speedline, keeping gold in a small falling channel.
Bullish Bias: If price can stay above 1190, there is still a bullish bias because price would be above the cluster of moving averages and above this week’s current low around 1187. Also, a break above 1210 at this point should break above the falling channel, which would make it a broken flag pattern and signal a bullish continuation in the short-term.
More Bearish Correction: If the current falling channel holds for another bearish swing, we can look for the 1175-1180 area for the next possible support. A break below 1170 should shelve the bullish correction mode and put Gold in a neutral-bearish mode, especially if the 4H RSI falls back below 30.
While the 4H chart presents a sideways-bullish mode, we should remember that gold has been bearish since July. We can see this in the daily chart.
Resistance: If gold does break above 1210, the next resistance could be in the 1230-1235 area. On the daily chart, we can see that in this area, there is a falling trendline from July and the 100-day SMA. Also, the RSI would likely be back around 60. If gold is still bearish on the daily chart, there should be a bearish attempt from 1235 as the RSI nears 60 (forgiving a brief break above it).
A break above 1240 with the RSI breaking above 60 however would be another story, and we would have to consider the downtrend from July to be over.
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