Gold Prices in Freefall as U.S. Dollar Rally Stretches
- Goldbreaks through key near-term support- Focus remains lower
- Updated targets & invalidation levels
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Technical Outlook: Gold prices broke through a key support zone noted last week at 1203 and a weekly close below this level would keep the focus lower in gold targeting 1171 and a more significant support confluence at 1120/30- this level is defined by the 1.618% extension of the decline off the high, the 76.4% retracement of the December rally & the 2014 low and converges on the lower median0line parallel (red) over the next few days. Initial resistance stands at former support with our medium-term bearish invalidation level now set to 1241 where the October low converges on the 52-week moving average. Note that weekly RSI has also broken below the 40-threshold for the first time sine
Notes: A closer look at the daily chart highlights the significance of today’s break and we’ll need to see a close below support to keep the immediate short-bias in play. Note that today’s low was just cents off the October 2015 high-day close and may offer a brief reprieve for the battered metal. That said, I’d be looking to fade strength while below 1203 with a break lower targeting 1171, a minor target at 1142 & key support at 1120/30.
Relevant Data Releases
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---Written by Michael Boutros, Currency Strategist with DailyFX
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