Gold Technical Analysis 16th July Forecast
XAUUSD Technical Notes – Week Commencing 16th July 2012
- Potential for a breakout of the wedge consolidation patten over the coming trading sessions.
- The gold spot chart below (daily time frame) shows how price is caught in an extended consolidation phase, and has respected the upper and lower trend line boundaries, during recent trading.
- Our long timeframe gold technical analysis post from earlier this week gives a breakdown of the longer term technical elements in play, and shows how the precious metal is still trading under the trend line dating back to 2008; the price action has not seen a break above any significant price structure lower high and therefore a bearish bias remains.
- The 20 and 100 period SMA’s (Simple Moving Averages) are both also sloping lower. However, the horizontal support level around $1530 has proved to be an area of demand and this is likewise worthy of note.
- In the near term we are watching the price action around this consolidation wedge and looking for a confirmed breakout in either direction to show the way forward. Gold has been searching for direction over recent weeks and a mid term resolution could potentially be found on a breakout of the current range.
- Aggressive XAUUSD bears may be viewing a break under the low from Thursday as a potential early entry into a break below key $1500 area support.
- $1640.55 is the monthly inside candle range high and $1544.65 is the range low. Inside bar/inside candle breakouts can be utilised as an additional directional bias indicator when price trades sideways, as is the case recently.
Gold Spot (Daily Chart)