Gold markets pulled back a bit during the trading session on Tuesday, breaking towards the $1270 level. If we can break down below the candle stick then I think the market starts unwind towards the $1250 level, and then possibly the $1200 level. Until then, I believe that short-term rallies will show signs of exhaustion, and therefore I like the idea of fading short-term rallies.
Gold Outlook Video 22.05.19
The $1290 level above is resistance that extends all the way to the $1300 level, and as a result it’s likely that we will continue to see short-term charts offering nice selling opportunities. As the US dollar strengthens that will typically work against the value of gold. However, if things get far too bad, then you could see US dollar strength and gold strength at the same time. The downtrend above at the $1300 level being broken to the upside allows the market to go towards the $1315 level, and then perhaps the $1325 level.
That being said, I do prefer fading those rallies and it’s not a huge surprise that we would continue to go sideways here as we await the next round of blows coming from the global trade war and of course we are hanging about the 200 day EMA which also attracts a lot of attention. Looking at the chart, and simply wait for value to appear in the US dollar overall. Expect a lot of volatility.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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