Gold Technical Analysis: Rally Approaching Critical Resistance at 1278
- Gold rally eyeing critical long-term resistance range- longs at risk into 1278
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Gold is attempting to close above the 200-day moving average for the first time this year & after five failed attempts. The focus now shifts to critical resistance highlighted last week around 1278- this region is defined by the 100% ext of the advance off the December lows & the 61.8% retracement of the decline off the 2016 high and converges on key longer-term slope lines extending off the 2011 record highs & the 2016 high.
Bottom line: gold is coming into some serious resistance here with the long bias at risk heading into this key region. Interim support now back at the 200-day moving average with a break sub-1241 needed to shift the medium-term focus lower. From a trading standpoint, I’ll be looking for exhaustion / short-triggers on a move into the upper parallels. That said, if we break higher there’s open range to the May highs at 1303.
- A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net-long Gold- the ratio stands at +2.14 (68.2% of traders are long)- bearish reading
- Long positions are 6.1% lower than yesterday but 5.3% higher from last week
- Short positions are 10.7% higher than yesterday and 7.7% lower from last week
- Despite the fact retail remains net-long, the recent build in short positioning continues to highlight the immediate topside bias- but look for this to change as prices approach key resistance.
---Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.