Gold Stalls at Technical Resistance- Remains Constructive Above 1262
- Gold long bias at risk below near-term technical resistance
- Broader trade remains constructive above $1262
- Event Risk on Tap
Chart Created Using FXCM Marketscope 2.0
- Gold rallies into pitchfork resistance- near-term bearish invalidation
- Interim support $1280 & $1262/68- bullish invalidation
- Topside resistance breach targets objectives at $1320/21 & $1335 (July HDC)
- Daily RSI coming into 70-resistance – breach would be bullish
- Multiple momentum support triggers pending
- Event Risk Ahead: FOMC Interest Rate Decision on Wednesday
Notes: We’ve been tracking the gold trade higher since early in the month with the rally now testing technical resistance just above the $1300-mark. Longs below the upper median-line parallel (blue dashed) are now at risk with medium-term bias remaining weighted to the topside while above the median-line off the November low.
Bottom line: high probability of a pullback here with such a scenario likely to offer more favorable long-entries while above $1262. A break below this level invalidates the long scalp-bias with subsequent support objectives eyed at $1248 & $1237. A breach above the upper median-line parallel keeps the long-bias in play targeting objectives towards the July highs. Caution is warranted heading into mid-next week with the FOMC interest rate on Wednesday likely to fuel added volatility in USD crosses and dollar based 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
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---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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