- Gold has broken the wave high of USD 1747.82 to trade at a level not seen since 2012.
- The price broke a key chart pattern on Thursday and now Fib extension targets are in play.
Fundamental backdrop
What a trend we are in in the gold market. It seems fears have been stoked by the potential of the trade war between the US and China escalating again. Just today it has been noted that the US are moving to cut Huawei off from its global list of chip suppliers. This is a statement of intent against Chinese manufacturers as their sales in the US are important. Adding to this White House trade advisor Navarro stated the word is out now and firms must manufacture in the US in order to sell in the US. The Trump protectionist trade is back with a vengeance.
Softing the US stance, we received mixed signals when Larry Kudlow (Director of the Economic Council in the US) said the trade deal with China is absolutely not falling apart. He went on to have some damning words about the economy saying it's still in "free fall" and The US cannot spend its way out of the pandemic downturn. I bet they are not ready to turn of the printers just yet though.
Technical picture
Looking at the technicals now there is a massive confluence level on the daily chart below. The 161.8% extension from the last wave matches the 138.2% extension from the bigger previous wave down. In addition to this, the level is also the wave high from the weekly chart (shown lower in the article). Levels this strong in confluence do not come around very often so it will be interesting to see what kind of reaction we get at that price. One thing is for sure, if it breaks it will be significant and the all-time highs are next.
-637251563131772228.png)
The weekly chart shows how important the aforementioned resistance zone is. There were three very strong bounces at the level and it might come into play soon. The Relative Strength Index indicator (RSI) on the chart shows there is still some room to the upside. Also of note, there is now a possible three-wave divergence forming, but if the price does break high it would take it out and the indicator signal line could move over the 70 mark.
-637251562455478262.png)
Additional levels
All information and content on this website, from this website or from FX daily ltd. should be viewed as educational only. Although the author, FX daily ltd. and its contributors believe the information and contents to be accurate, we neither guarantee their accuracy nor assume any liability for errors. The concepts and methods introduced should be used to stimulate intelligent trading decisions. Any mention of profits should be considered hypothetical and may not reflect slippage, liquidity and fees in live trading. Unless otherwise stated, all illustrations are made with the benefit of hindsight. There is risk of loss as well as profit in trading. It should not be presumed that the methods presented on this website or from material obtained from this website in any manner will be profitable or that they will not result in losses. Past performance is not a guarantee of future results. It is the responsibility of each trader to determine their own financial suitability. FX daily ltd. cannot be held responsible for any direct or indirect loss incurred by applying any of the information obtained here. Futures, forex, equities and options trading contains substantial risk, is not for every trader, and only risk capital should be used. Any form of trading, including forex, options, hedging and spreads, contains risk. Past performance is not indicative of future FX daily ltd. are not Registered Financial Investment Advisors, securities brokers-dealers or brokers of the U.S. Securities and Exchange Commission or with any state securities regulatory authority OR UK FCA. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest, with or without seeking advice, then any consequences resulting from your investments are your sole responsibility FX daily ltd. does not assume responsibility for any profits or losses in any stocks, options, futures or trading strategy mentioned on the website, newsletter, online trading room or trading classes. All information should be taken as educational purposes only.
Recommended Content
Editors’ Picks
EUR/USD holds on to intraday gains after upbeat US data
EUR/USD remains in positive ground on Friday, as profit-taking hit the US Dollar ahead of the weekend. Still, Powell's hawkish shift and upbeat United States data keeps the Greenback on the bullish path.
GBP/USD pressured near weekly lows
GBP/USD failed to retain UK data-inspired gains and trades near its weekly low of 1.2629 heading into the weekend. The US Dollar resumes its advance after correcting extreme overbought conditions against major rivals.
Gold stabilizes after bouncing off 100-day moving average
Gold trades little changed on Friday, holding steady in the $2,560s after making a slight recovery from the two-month lows reached on the previous day. A stronger US Dollar continues to put pressure on Gold since it is mainly priced and traded in the US currency.
Bitcoin to 100k or pullback to 78k?
Bitcoin and Ethereum showed a modest recovery on Friday following Thursday's downturn, yet momentum indicators suggest continuing the decline as signs of bull exhaustion emerge. Ripple is approaching a key resistance level, with a potential rejection likely leading to a decline ahead.
Week ahead: Preliminary November PMIs to catch the market’s attention
With the dust from the US elections slowly settling down, the week is about to reach its end and we have a look at what next week’s calendar has in store for the markets. On the monetary front, a number of policymakers from various central banks are scheduled to speak.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.