You are here: Home > articles > Forex > Technical Analysis – Gold trades higher but not yet ready for a full reversal
Technical Analysis – Gold trades higher but not yet ready for a full reversal
October 9, 2023 8:27 amVideo
Latest News
- Euro will return to parity April 12, 2024
- Trading Signals for ETH/USD (Ethereum) for April 12-15, 2024: buy above $3,435 (3/8 Murray – 200 EMA) April 12, 2024
- EUR/USD. Analysis for April 12th. The euro falls down under the pressure of the news background April 12, 2024
- GBP/USD. Analysis for April 12th. A significant event: the pound fell below the 25-figure April 12, 2024
- Trading Signals for EUR/USD for April 12-15, 2024: buy above 1.0620 (-2/8 Murray – rebound) April 12, 2024
- GBP/USD: trading plan for the US session on April 12th (analysis of morning deals). The pound followed the euro April 12, 2024
- EUR/USD: trading plan for the US session on April 12th (analysis of morning deals). The euro continues to fall April 12, 2024
- EUR/USD and GBP/USD: Technical analysis on April 12 April 12, 2024
- EUR/USD: Dovish signals from the ECB and rising PPI April 12, 2024
- EUR/USD. April 12th. ECB meeting: confidence in rate cut increased in June April 12, 2024
- GBP/USD. April 12th. British economy continues to stagnate April 12, 2024
- Analysis and trading tips for EUR/USD on April 12 (US session) April 12, 2024
- Analysis and trading tips for USD/JPY on April 12 (US session) April 12, 2024
- Analysis and trading tips for GBP/USD on April 12 (US session) April 12, 2024
- Weekly Forex Outlook: 12/04/2024 – More inflation data on the way as rate cut bets in disarray April 12, 2024
- Technical Analysis – GBPUSD ticks down to new 5-month low April 12, 2024
- Bitcoin holds above $70,000 as halving event looms – Crypto News April 12, 2024
- Week Ahead – More inflation data on the way as rate cut bets thrown into disarray April 12, 2024
- Bitcoin will thrive during supply crisis April 12, 2024
- Technical Analysis – EURUSD plummets after US CPI and ECB decision April 12, 2024
Gold jumps higher on the back of geopolitical risks
This is the first reaction from the bulls after the strong sell-off
Upleg could have legs if momentum indicators align
Gold is trading higher today as the bulls are trying to recover part of the significant losses incurred during the nine consecutive red candles that pushed gold from the mid-1,900s down to 1,800. The bulls’ ability to continue this upleg is critical for the short-term outlook of gold.
In the meantime, the momentum indicators are not yet fully endorsing the current move higher. The RSI is rising towards its midpoint again, confirming the weaker bearish tendency in the market. Similarly, the Average Directional Movement Index (ADX) has probably peaked and is edging lower; an indication that the recent downleg has probably ended for now. More importantly, the stochastic oscillator has crossed above its moving average (MA) and it is preparing to jump above its oversold territory. If this takes place, it could be seen as a strong bullish signal.
Should the bears regain market control, they would quickly try to break the 50% Fibonacci retracement of March 8, 2022 – September 28, 2022 downtrend at 1,843. They could then try to push gold towards the 1,789-1,795 area, which is populated by the October 5, 2012 high and the 38.2% Fibonacci retracement. This is a key area for medium-term sentiment and the bears could also be given the chance to record a new 2023 low.
On the other hand, the bulls are probably keen on building upon the current reaction. They could try to stage a move towards the busy 1,896-1,916 range that is defined by the Jun 1, 2021 high, the 61.8% Fibonacci retracement, the 50-day simple moving average (SMA) and the May 4, 2023 descending trendline respectively. Overcoming this range appears to be a very difficult task for the bulls but if successful, it will open the door for a stronger rally.
To sum up, gold bulls have found the necessary strength to react after a sizeable downleg, but for the current rally to continue they need to draw strong support from the momentum indicators.
Related Posts: