Gold has rallied overnight with more 'flight to safety' activity following further weak US data. The metal has broken up through a three year+ bear trend line and any continued US$ weakness will help to keep the metal supported. Traders need to watch and see if there is a weekly candle close above this bear trend line to confirm a bullish-descending wedge breakout and, if this evolves, I have identified key levels to to target for any bullish continuation move. As well, my TC LONG signal is still open and has now given up to $23!
Gold 4hr: the TC LONG signal is still open here and has given up to $23. Note how price action has balked at the $1,145 resistance level. This S/R zone is just below another major S/R zone being the 61.8% fib from the monthly chart.
Gold 60 min: I Tweeted last night to watch the trend lines on the 60 min chart and this was how the chart appeared in that Tweet:
This is the 60 min chart on waking this morning:
Gold daily: the daily candle looks set to close above the bear trend line.
Gold weekly: there will be a daily candle close above this bear trend line but breakout needs to be confirmed with a weekly candle close above this trend line.
Bullish targets to watch for any weekly candle breakout are best viewed on the weekly chart below. I've added Fibonacci retracement to the 2012-2015 swing low move to help identify targets and I'd be watching the following levels:
- the monthly chart's 61.8% fib near $1,150.
- the $1,200 S/R level.
- the monthly chart's bear trend line.
- the recent swing low's 50% fib near $1400.
- the recent swing low's 61.8% fin near $1,500.
Gold monthly: the importance of the 2007-2011 swing low move 61.8% fib can be seen on this chart.
US$ weekly: the US$ traded lower during the last session as further weak US data seems to be undermining the timeline for any further US rate increase. Continued US$ weakness will help to support Gold and other commodities in more of a 'risk on' move rather than 'flight to safety'. I'll be watching for any move back down to 92.50, the bottom of the 12 month+ trading channel and, after that, the 61.8% fib down near the weekly 200 EMA:
Summary: there is an open TC LONG signal on Gold but traders should watch to see if there is any weekly candle breakout from the bullish-reversal descending wedge pattern.