The Gold markets have bounced significantly from the 200 day EMA, which of course is a bullish sign. There is also horizontal support at the $1275 level so that of course mean something as well. Above here, there is the previous neck line from the potential head and shoulders pattern, but the 200 day EMA will be followed by a lot of traders as well. That being the case, it’s very likely that the market will be very nervous and very noisy in this general vicinity.
Gold Price Predictions Video 26.04.19
With all of that in the backdrop, we are probably simply going to trade against the US dollar. If the US dollar strengthens drastically, that will almost certainly put gold under intense pressure. However, if the US dollar sells off then we could see a break above the previous neck line. If we get that, then the $1300 level will be the next target, followed by each of the highs going forward.
The reaction on Thursday does give me pause as to my bearish attitude, but quite frankly the real fight will be above at that trend line. Obviously, if we turned right back around and sold off to break through the hammer that formed on Tuesday, then that would be a very bearish sign and send this market down to the $1250 level, the $1225 level, and then possibly even the $1200 level after that. At this point, you are probably better off monitoring this market as we head into the Friday session, which of course means we head into the weekend and a lot of position closing.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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