Gold Rebound Vulnerable Sub $1207- Weekly Opening Range in Focus
- Gold rebound at risk sub $1206/07
- Weekly opening range in focus- Break to validate scalp bias
- Event risk on tap this week
Chart Created Using FXCM Marketscope 2.0
- Key resistance confluence at 1206/08- Longs at risk into this region
- Daily RSI testing resistance trigger- break would be bullish
- Key support 1177/80- bullish invalidation
- Resistance breach targets ML ~1230 & 1237
- Event Risk Ahead:Swiss Referendumand second read forUS 3Q GDP
Notes:Gold rallied into key resistance on Friday on the back of a surprise rate-cut from the PBOC and a fresh batch of dovish rhetoric from ECB President Mario Draghi. We’ve been on the long side of the trade sincelast Friday’s outside reversal candleand longs sub-1206/08 are now at risk here with a pullback likely off these levels. Note that the monthly opening range clearly broke to the topside last week and we should be looking for a late month high. That said, its late in the month & we’re coming off a pretty big level of resistance.
Bottom line: the trade remains constructive while above median line support off the monthly low with a breach above 1208 needed to keep our bias weighted to the topside. A break sub 1177/80 shifts the near-term outlook back to the short-side of the trade with support eyed at 1151/55 and the monthly lows. A breach of the highs targets into $1230.
* It’s extremely important to give added consideration regarding the timing of intra-day scalps with the opening ranges on a session & hourly basis offering further clarity on intra-day biases.
Other Setups in Play:
- Scalping the AUDUSD Correction- Longs Favored Above 8565
- Scalping the EURNZD Recovery- Interim Resistance 1.5980
- NZDUSD Rally at Risk Sub 7975- Scalps Target Near-term Correction
- EURJPY Rally at Risk sub 1.4450- Short Scalps Eye Weekly Lows
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
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