Gold ends the correction
Alpari Research & Analysis | Oct 09, 2017 03:48AM ET
September was not the best month in the history for Gold, actually it was pretty awful. The price reached new yearly highs but after that fell sharply like a rock. October starts a bit better and actually we can see a potential to end the downswing and start the new bullish wave here.
What positive factors can we see on the chart? First of all, we are still in the up trend (above the up trendline, black), so the price is making higher highs and higher lows. What is more, on Friday, thanks to the NFP, the price draw a nice bullish candlestick, which shows us the increasing demand for this precious metal. Crucial here, is the place, where this bounce is happening. Foremost, this support is a combination of the two Fibonacci retracements: 61,8% of the most recent upswing and 38,2% of the main long-term up trend. In addition to that, we have here a correction equality pattern – current correction has the same depth as that one seen in the June-July. Last but not least, we do have a technical formation here - a flag (green lines). Flag is a trend continuation pattern and a breakout of its upper line triggers a buy signal.
As you can see, we do have quite strong combination of bullish factors here. All coming together vastly increase the chances for an upswing. As for the negative factors I cannot see anything significant. Positive sentiment will be denied once the price will break the Friday's lows, which for now seems less probable.
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