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Friday, November 07, 2014

Gold – Rests on Support at $1140



In the last few weeks gold has fallen very strongly and resumed the medium term down trend falling from above $1250 back down through the key $1240 level, down below $1200 to a multi year low around $1140.   In the first few days to start this week gold was able to find support at $1160 and consolidate after its very strong fall, before falling again strongly in the last 48 hours.
  In the last 24 hours it has been able to consolidate and find support around $1140.   A few weeks ago Gold ran into the previous key level at $1240, however it also managed to surge higher to a five week high at $1255. After enjoying some solid support at $1215 for a couple of weeks, gold dropped to its lowest level in 2014 near $1180 earlier this month.
Now that the key $1200 level has been broken, this level is likely to play a role should gold rally again. In late August Gold enjoyed a resurgence as it moved strongly higher off the support level at $1275, however it then ran into resistance at $1290. In the week prior, Gold had been falling lower back towards the medium term support level at $1290 however to finish out last week it fell sharply down to the previous key level at $1275. During the second half of June, gold steadily moved higher but showed numerous incidents of indecision with its multiple doji candlestick patterns on the daily chart, around $1320 and $1330. The OANDA long position ratio for Gold has eased back to 65% as gold has dropped very sharply back down below $1140.
At the beginning of June, gold did very well to repair some damage and return to the key $1275 level, then it has continued the momentum pushing a higher to its recent four month high. After moving so little for an extended period, gold dropped sharply back in May from above the well established support level at $1275 as it completely shattered this level falling to a four month low around $1240. It remained around support at $1240 for several days before its strong rally higher. It pushed down towards $1280 before sling shotting back and also had an excursion above $1300 for a short period before moving quickly back to the $1293 area again.
Gold edged higher on Thursday as a in the dollar took some pressure off the precious metal its slump to four-year lows, but prices remained ahead of a European Central Bank policy statement in the day.  A surge in the dollar, in which gold is priced, has knocked metal in recent days through key chart support at $1,180 an—the lowest level hit during last year’s 28 percent—and $1,155 to its lowest since early 2010 at $1,137.40.   Spot gold ticked up 0.2 percent to $1,143 an ounce. It tumbled over 2 percent to a 4-1/2 year low of $1,137.40 on Wednesday, following sharp losses after falling through support at $1,160 and $1,150. U.S. gold futures for December delivery were down by nearly $4 an ounce to $1,142.  Silver prices were also battered, tumbling more than 4 percent on Wednesday, their biggest one-day retreat in more than a year, at one point hitting a 4-1/2 year low of $15.13. It was down 0.3 percent at $15.29 an ounce.
(Daily chart / 4 hourly chart below)
g_20141107g_20141107_4hour
Gold November 6 at 21:40 GMT   1141.4   H: 1149.6   L: 1138.2
Gold Technical
S3 S2 S1 R1 R2 R3
1140 1200 1255
During the early hours of the Asian trading session on Friday, Gold is trading in narrow range between $1140 and $1150 after falling very sharply to close out last week and to start this new week. Current range: trading right around $1140.
Further levels in both directions:
• Below: 1140.
• Above: 1200 and 1255.
OANDA’s Open Position Ratios
g_20141107_ratio
(Shows the ratio of long vs. short positions held for Gold among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The long position ratio for Gold has eased back towards 60% as gold has dropped very sharply down to $1140. The trader sentiment is strongly in favour of long positions.
Economic Releases
  • 07:00 EU EU Finance Ministers Hold Meeting in Brussels
  • 09:30 UK Trade Balance (Non-EU)
  • 09:30 UK Visible Trade Balance (World)
  • 13:30 CA Unemployment (Oct)
  • 13:30 US Private & Non Farm Payrolls (Oct)
  • 13:30 US Unemployment (Oct)
  • 20:00 US Consumer Credit (Sep)
  • AU RBA Release Statement on Monetary Policy
* All release times are GMT

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