Gold- Fundamental Vs Technical Analysis
AvaTrade | May 27, 2015 05:07AM ET
Fundamental Analysis
The consumer confidence and US home sales data were a real slap in the face if you are trading gold and hoping for the upside. However, the technical for gold are pointing for oversold signal which could just may provide a little pause in this sell off or give us a mean reversion trade.
But, make no mistake it is the strength in the dollar, which is the main denominator and this is impacting the price for both gold and oil. Janet Yellen’s comments have really inflated the sentiment among dollar bulls who are feeling very confident with their long position that the rate hike will finally take place this year.
Sadly, this is not a joyful news for oil traders, although you can argue that the commodity has formed a strong bottom for now, but it is still difficult to sleep at night for traders who are holding long positions in crude or Brent.
Technical Analysis
The aggressive sell off has paused for the time being. If the price cross its 61.8% Fibonacci retrenchment level, the probabilities will be stacked in favor for the upside move. However, if the price fails to break above the 38.2% or the 50%, then the bias remains towards the downside.
Important Levels
1178-1169 Support
1214-1210 Resistance level
Disclosure & Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.
by Naeem Aslam
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.