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XAU/USD has come under steady pressure since failing on a closing basis late last month at the 7th square root progression of the year-to-date low near 1418. The decline that has followed has been unimpressive and looks only corrective in nature. However, a big test of this this view will come around 1357 to 1337 as this zone marks a convergence of the 2nd square root progression of the August high, the 5th square root progression of the year’s low and the 38% retracement of the June-August advance. If the metal is set to undergo a more immediate upside resumption then this is the support zone from where it should probably occur. Too much additional weakness beyond1337 would raise the possibility that a much more volatile and drawn out corrective process will play out. Only aggressive weakness below 1270 would turn the technical outlook in Gold more overtly negative.
USD/JPY Daily Chart: September11, 2013
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risks in Coming Sessions:
LEVELS TO WATCH
Resistance: 1383(Gann), 1418 (Gann)
Support: 1337 (Fibonacci), 1350 (Gann)
Strategy: Buy Gold
Entry: Buy Gold at 1351
Stop: 1-day close below 1337
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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