Gold Scalps Target Key Inflection Range- Rally at Risk Sub-$1237
- Gold rally coming into first major resistance target
- Longs at risk sub-$1237
- Event risk on tap next week
Chart Created Using FXCM Marketscope 2.0
- Long bias at risk below resistance confluence at $1236/37- bearish invalidation
- Key support remains $1137/55- Subsequent support targets at $1099 & $1044
- Resistance breach targets objectives at $1248 & $1262/68
- Daily RSI resistance trigger pending- break would be constructive
- Event Risk Ahead: US Retail Sales on Thursday & University of Michigan Confidence Survey on Friday
Notes: Last month we highlighted the risk of a near-term pullback in gold prices as we approached the $1206 resistance barrier after gold posted its third consecutive week of advances. The subsequent sell-off got as deep as the $1137/55 key support region before rebounding sharply on December first. The rally has now reached its next area of key resistance at $1236/37. Long below this mark are now at risk and our immediate focus is against this level.
Bottom line: looking lower near-term with the proposed pullback likely to offer more favorable long entries. The trade remains constructive above the median line with only a move sub $1179/80 shifting the medium-term outlook back to the short-side. A breach of the highs targets resistance objectives into $1248 & $1262/68. Caution is warranted heading into US event risk later this week with the release likely to fuel added molality in the greenback and USD denominated assets.
* 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.
Relevant Data Releases
Other Setups in Play:
- AUDCAD Short Bias Vulnerable- Scalps Target Weekly Opening Range
- Key EURUSD Scalp Targets Heading Into ECB / NFPs
- Scalping the AUDNZD Rebound- Key Resistance 1.09
- EURJPY Correction to Favor Short Scalp Entries Sub-1.48
---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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