Gold: Potential double bottom pattern is in process of formation

July 6 , 2018

 

By analyzing the daily technical chart we can observe that yellow metal slipped too much from $1342 to $1239 level.Overall gold was making successively lower lows and lower highs but after arriving at the $1239 level which is a strong key support level bulls made a counter attack at initial stage. From techical prospective the double bottom pattern is in process of formation however, we will further confirmation once it trades and settles above $1275 level. A valid breakout of $1275 level will open the way towards the $1300 level in short term.

 

A piercing pattern candlestick followed by a bullish marabuzo candlestick from past couple of days has converted all the bearish moemtum into bullish momentum. Still gold is trading below all the major and minor EMA lines but the bulls are taking the charge and dominating the bears at every nook & conrner. But still there is confusion in trader’s mind that is it a correction of trend reversal ?Well gold is still holding the $1250 level but Today the US Non-Farm Payrolls is likely going to dictate whether gold will break above 1,260 or will retrace below the 1,250.00 level.

 

 

Traders and investors are advised to sit aside and wait for the clear signal on either side. Well odds are in favor of bears and we will keep our bias bullish as long as pair $1240 level remains intact. The RSI is also supporting some bounce back as it has arrived into oversold territory and a bullish crossover has been occurred on the MACD indicator also which is also generting trend reversal signal for the time being. The 1240 is immediate support level followed by 1225 level whereas 1275 level is immediate resistance level followed by 1300.

 

 

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