The Gold market on the Weekly time frame was in an extended uptrend until the 2nd of August 2020 recording a higher top at 2074.87. That was followed by bearish pressure that upset the bulls, thus moving the market lower.
After the higher top (at 2074.87), the market broke through the 15 and 34 Simple Moving Averages and the Momentum Oscillator crossed into negative terrain as it pierced through the zero baseline. Both technical indicators and the market structure of lower tops and a lower bottom confirmed that the bears exercised enough pressure to start a new downward trend.
A possible critical support level formed on the 29th of November 2020 at 1764.53, after which the bulls started pushing back. They failed near a resistance level at 1959.39 on the 3rd of January 2021 and the bears took back control of the market.
It is important to note that although the downward trend is confirmed from a structural point of view (consecutively lower tops and bottoms), how far it might continue is always unsure, so risk management is essential.
If gold breaks through the critical support level at 1764.53 and makes another lower bottom, three possible price targets may be calculated from there. Applying the Fibonacci tool to the bottom of the support level at 1764.53 and dragging it to the resistance level at 1959.39, the following targets may be considered. The first target can be projected at 1644.11 (161 %). The second price target may be foreseen at 1449.25 (261.8%) and the third may be expected at 1133.96 (423.6%).
If the resistance level at 1959.39 is broken, the above scenarios are annulled, and appropriate action must be taken.
As long as sellers maintain a negative sentiment and supply keeps overwhelming demand, the outlook for the Gold Market on the Weekly timeframe will remain bearish.
For more information, please visit: FXTM
Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- Keep Trading the Technicals to Take Advantage of a Quiet News Week
- Trading Strategies to Suit The Week of 18th October
- Will Commodities Offer Protection From Inflation?
- Earnings Season to The Rescue – What to Watch Out for This Week
- State of the Nation – Up to Date Reports on Which Brokers Can be Trusted – FXTM
- ‘Diamond Hands’ Traders Get Ready to Buy
Keep Trading the Technicals to Take Advantage of a Quiet News Week
Trading Strategies to Suit The Week of 18th October
Safest Forest Brokers 2020
|Broker||Info||Best In||Customer Satisfaction Score|
|#1||Your capital is at risk Founded: 2011||Global CFD & FX Broker||
BEST FOREX BROKER Visit broker
|#2||Your capital is at risk Founded: 2014||Global Forex Broker||
BEST SPREADS Visit broker
|#3||Your capital is at risk Founded: 2014||Global Forex & CFD Broker||
Best Trading Conditions Visit broker
|#4||67% of CFD traders lose Founded: 2006||Global CFD & FX Broker||
ALL-INCLUSIVE TRADING PLATFORM Visit broker
|#5||Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010||Global Forex Broker||
Low minimum deposit Visit broker
Stay up to date with the latest Forex scam alerts
Sign up to receive our up-to-date broker reviews, new fraud warnings and special offers direct to your inbox