Gold Near-Term Bias Remains Bullish Above $1278
Matt Simpson | May 05, 2014 02:34AM ET
Gold appears to have formed a base above $1278 with 'risk-off sentiment' favouring an upside break
We have witnessed our 2nd consecutive bullish hammer above $1278 with a higher, low wick to suggest near-term strength in the coming week/s. This bias remains as bullish as we can stay above the $1278 swing low.
The 200 period eMA coincides with the $1395 swing high and sloping resistance line so we can expect some strong resistance around this area.
I have highlighted the potential for a larger triangle which would suggest weeks-months of wide price swings between $1180-$1395. However, as long as we remain above $1278 then we could also be witnessing an Inverted Head and Shoulders bottom, which if confirmed would target $1725. Let's not get ahead of ourselves just yet though.
The Bullish Hammer and Bullish Engulfing candles are at swing lows, with a higher-low to suggest a double bottom pattern is forming. Resistance around $1307 has so far been respected during Asia trading but any bullish breakout here could target $1323 and $1330 resistance zone. The pattern projects a target around $1345 but due to the confluence of resistance beforehand I will keep the target at the lower level for now.
Any break above $1330 swing high opens up $1345, $1355-61.
Ideally, the price will remain above the Monthly Pivot for an initial upside break to $1323. If we break above $1307 then seek bullish setups above this level.
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