Technical Analysis – Gold looking bullish in rising channel
February 12, 2014 9:11 am
Gold is looking bullish and has formed a rising channel. The market appears to have carved out a base at the December 31 low of 1182.16. The daily chart indicates there has been a relatively strong upside momentum since the bounce off this low.
A catalyst for the upside-move occurred when prices broke above the 100-day moving average which was acting as a resistance level around 1270. This area was also the 50% Fibonacci retracement level of the down-leg from the October 28 high (1361.60) to the December 31 low (1182.16).
The market is currently capped below the 61.8% Fibonacci level. A breach of this resistance level will clear the way for a move towards 1325, an area tested several times in November and is also the 78.6 Fibonacci level.
The ADX has risen sharply and is located just below the 50 point level, which is a good indication that the trend (upward) is strengthening. The stochastic is bullish and has risen above 80. While it is entering extreme levels (overbought territory) there is a possibility for gold prices to correction lower. Helping support prices would be the resistance-turned-support level around 1270 and below this the 1250 area (23.6% Fibonacci).
Gold is looking bullish and has formed a rising channel. The market appears to have carved out a base at the December 31 low of 1182.16. The daily chart indicates there has been a relatively strong upside momentum since the bounce off this low.
A catalyst for the upside-move occurred when prices broke above the 100-day moving average which was acting as a resistance level around 1270. This area was also the 50% Fibonacci retracement level of the down-leg from the October 28 high (1361.60) to the December 31 low (1182.16).
The market is currently capped below the 61.8% Fibonacci level. A breach of this resistance level will clear the way for a move towards 1325, an area tested several times in November and is also the 78.6 Fibonacci level.
The ADX has risen sharply and is located just below the 50 point level, which is a good indication that the trend (upward) is strengthening. The stochastic is bullish and has risen above 80. While it is entering extreme levels (overbought territory) there is a possibility for gold prices to correction lower. Helping support prices would be the resistance-turned-support level around 1270 and below this the 1250 area (23.6% Fibonacci).
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