News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • According to GS, S&P 500 daily returns are positively correlated with flows. Over the last 3 months, flows have been strong, but the $SPX was flat (model predicted a 7% rally). When SPX returns and flows deviate, they tend to mean-revert in subsequent periods #trading
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here:
  • Further your forex knowledge and gain insights from our expert analysts @ddubrovskyFX and @FxWestwater on JPY with our free Q4 market analysis guide, available for free today.
  • How does stock market liquidity benefit its traders? Learn more here:
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here:
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here:
  • Quarterly earnings from Netflix and Tesla, two big tech companies, will take center stage next week and could set the trading tone for the S&P 500 and the Nasdaq 100. Get your weekly equities forecast from @DColmanFX here:
  • Do you know the difference between investing and trading? Because while the goal might seem the same, they're very different things . Learn more here.
  • What is your forex trading style? Take the quiz and find out:
  • Further your trading knowledge and gain informed market analyses from our expert analyst @DavidJSong on Oil with our free Q4 guide, available for free today.
Gold Prices Build into Bull Pennant - But Can Bears Break Support?

Gold Prices Build into Bull Pennant - But Can Bears Break Support?

James Stanley, Senior Strategist

Gold Price Analysis

Gold Prices Calm, Coil After Enthralling Two-Sided Volatility

After a quick rush of volatility in the month of March, global markets continue to calm as a cavalcade of stimulus announcements have helped to bring some support into global equities. As looked at yesterday, that support has been strong thus far as the Nasdaq 100 has run-up by as much as 41% from those March lows, going positive for the year of 2020. The S&P 500 and the Dow Jones Industrial Average are lagging those numbers; but the fact that equity markets went from a sharp bearish backdrop into a strongly bullish scenario has, at the least, allowed for a bit of calm as the world wrestles with a global pandemic.

This has had significant impact in Gold prices. As fear was picking up in March, Gold prices sold off by almost a full 15% in about a week. Support came in around a familiar area, the same zone around 1450 that helped to hold the lows during the Q4 pullback last year – and buyers made a pronounced re-entry back into the equation, helping to bid Gold prices up to fresh seven-year-highs. That took place on April 14th and, since then, price action in Gold has been largely mean-reverting with both lower-highs and higher-lows, setting up a symmetrical wedge formation atop the prior bullish trend.

Gold Four-Hour Price Chart: 14.8% Sell-Off, 20.4% Rally – Then Coil

Gold Four Hour Price Chart

Chart prepared by James Stanley; Gold on Tradingview

The above formation is known as a bull pennant, when a symmetrical wedge formation builds atop a prior topside trend. Such formations will generally be treated as continuation setups, looking for the prior trend to continue after digesting gains within the wedge; and these can often come into play after a fresh breakout has run into some element of resistance that causes bulls to pullback and then shy away; as trend traders look to buyer higher-lows allowing for the simultaneous build of both higher-lows and lower-highs.

Taking a step back on the chart, and there’s possible motive for resistance around recent highs. The 14.4% Fibonacci retracement comes in around 1742.50, which aligns well with that mid-April swing-high; after which buyers have been unable to break-up to a fresh higher-high even as the monetary cannons remain on full blast.

Gold Monthly Price Chart

Gold Monthly Price Chart

Chart prepared by James Stanley; Gold on Tradingview

Gold Near-Term Strategy: Beware the Potential for a Trap

The above formation is fairly clear and visible; and has been for much of May trade. What’s suspicious and what should create caution for traders looking at continuation is the fact that buyers haven’t yet been able to pose a topside breakout. Given the technical formation, given the prior breakout and incorporated with the fundamental backdrop – which likely won’t be bringing any rate hikes anytime soon – there appears to be ample motivation on the long side of the matter. Yet, for almost a full month – price action has continued to coil, remaining subdued below that longer-term Fibonacci level looked at above.

This could have the possible makings of a bull trap, and may open the door for a deeper push to support before that bigger-picture, longer-term bullish trend is ready for continuation.

On the support side of Gold, there are a few notable areas of interest. The area from around 1675-1682 could be followed as a nearby zone of potential support; and below that is a confluent batch of levels spanning from around 1628.50 up to 1640 that can be followed for secondary support.

Gold Price Four-Hour Chart

Gold Four Hour Price Chart

Chart prepared by James Stanley; Gold on Tradingview

--- Written by James Stanley, Strategist for

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.