GOLD: What's Next In Store?
At the back end of last week, we saw gold shoot up out of its box region ($1283 to $1290) all the way to its key level of $1300. This spike tied in nicely with the horrendous NFP data, as the US only published 20,000 jobs in the month of February.
As we take a look at the technicals, last Friday's candle (8th March), shows us a clear breakout of the box region to our next resistance area at $1300.00 psychological round number. Since then, we have backed off and retreated to $1296 at the time of writing. What I see potentially unfolding, is one more push up to the $1300 area before coming back down to revisit the lows seen in our box region at $1284.00/$1285.00. This will also tie in nicely with our long Dollar bias, having just broken out of our wedge formation on the DXY. The two are correlated to a certain extent, as they are seen as risk on and risk off barometers. So if one goes up, the other usually goes down -in normal market conditions that is. However, we are not in normal market conditions.
On the flip side, a clean break and close above the $1300.00 level, and this could open the door up to our next resistance level at $1325.00 on a longer-term time frame. This would be a slow grind higher and could take several weeks to play out. My overall bias for the pair is too the short side and see a push higher before coming back lower, as the most favourable setup.
As always, take my analysis inline with your own and only if you are confident in your own analysis then can you take the trade....