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17 Jul 2013
What's the upside potential in Gold?
FXstreet.com (Barcelona) - Following the relentless fall just shy off 1,800 last Sept 2012, Gold has found a significant increase in buyer's participation, a type of intensity to join bids only seen through April 16 to 29 since the April 11 bloodbath, as last attempt mid May being constantly challenged by selling interest too.
Gold closes above 20-day EMA
It is important to note that throughout the ongoing Gold bearish cycle, price has been systematically repelled off the 20-day EMA as seen in the past two meaningful corrections developed and noted above. However, on Tuesday, and ahead of Bernanke's testimony, Gold bulls were able to regain and most importantly, close above the 20-day EMA, a milestone as this is the first time it does since the slaughter went out of control in April. Sings of more upside to come?
Gold technical outlook
According to Fan Yang, Technical Analyst at FXTimes: "While the lows are getting higher, the higher remains just under 1300, forming somewhat of an ascending triangle. This reflects slight bullish bias." Fang sees a break above 1300 now necessary to open up further bullish correction, adding "this would also clear above a falling speedline going back to the June high around 1422, and since the range is about 33 points (1300-1267), we can anticipate a break to open up 1333, or just 1330."
On the downside, Yang fears that a revisit below 1267 can cause sellers to gain control again, with 1250 down to 1244 the area that would be immediately exposed. Fan went on saying "To the downside, there is a rising trendline developing from the 2013-low which needs to be broken to revive a bearish outlook toward the 1200 handle, 1180 low or lower."
Gold closes above 20-day EMA
It is important to note that throughout the ongoing Gold bearish cycle, price has been systematically repelled off the 20-day EMA as seen in the past two meaningful corrections developed and noted above. However, on Tuesday, and ahead of Bernanke's testimony, Gold bulls were able to regain and most importantly, close above the 20-day EMA, a milestone as this is the first time it does since the slaughter went out of control in April. Sings of more upside to come?
Gold technical outlook
According to Fan Yang, Technical Analyst at FXTimes: "While the lows are getting higher, the higher remains just under 1300, forming somewhat of an ascending triangle. This reflects slight bullish bias." Fang sees a break above 1300 now necessary to open up further bullish correction, adding "this would also clear above a falling speedline going back to the June high around 1422, and since the range is about 33 points (1300-1267), we can anticipate a break to open up 1333, or just 1330."
On the downside, Yang fears that a revisit below 1267 can cause sellers to gain control again, with 1250 down to 1244 the area that would be immediately exposed. Fan went on saying "To the downside, there is a rising trendline developing from the 2013-low which needs to be broken to revive a bearish outlook toward the 1200 handle, 1180 low or lower."