Follow The XM Bull
Monthly
January has started with upward action. Still changes are shy here.
Trend holds bearish. As on EUR, here I also have drawn new yearly Pivot
Points. Appearing of 1361 Yearly PP could get special meaning from
possible retracement point of view. It could become possible nearest
upside target. Yearly PR1 is also very significant. We know that gold
likes to re-test previously broken lows and consolidations. 1540 area is
monthly overbought, YPR1 and low border of broken long-term rectangle.
As market was strongly oversold, why it can’t reach overbought? This is
very typical action for any market. As another application of significantly oversold we’ve suggested retracement up. Thus, we’ve made an assumption of possible deeper upward retracement that could take a shape of AB=CD, and invalidation for this setup is previous lows around 1170s. In fact current move up could be the last chance for possible upward bounce, if, say, market will show something like double bottom. Currently price action is very suitable for that – W&R of first bottom. This action in general is very typical for double bottoms and fake breakout could be the first sign of possible retracement up. Bearish market has no other reasons to stop right here, since there is no support right now – it has passed through 3/8 support, it’s not at oversold. Currently we should keep a close eye on move up.
At the same time fundamental data, except physical demand and CFTC recent data do not quite support upward action, at least right now. May be a bit later situation will change, but market will enter seasonal bearish trend in February and it will be even more difficult to continue move higher.
Weekly
Trend has shifted bullish here. Upward action couldn’t get solid
momentum yet. Price move is very gradual. Initially we’ve thought that
this could become butterfly “buy” pattern, but it also could be “222”
Buy, since if we’ve suggested that AB=CD has been completed and W&R
really has happened, this could be double bottom. Also take a look, we
have solid bullish divergence with MACD. By treating valleys as AB=CD
pattern we’ll see that minor extension stands almost right at Yearly
Pivot Point, and 1.618 extension stands slightly higher than Yearly PR1.
This is really interesting agreement. Weekly chart points that we
should search possibility for long entry. Odds suggest that after AB=CD
completion market usually shows at minimum 3/8 retracement, and on the
weekly chart this will be not small move. This, of cause, makes sense
only if W&R of 1180 lows really has happened. If we will be wrong
with this suggestion then we will get the trap that we’ve discussed
previously. Now as we can see, price has reached monthly PR1.
Daily
Almost every day of passed week we’ve talked about upward continuation
by some technical reasons. On Friday this action has taken place and
market has reached MPR1 and re-tested 1250 Fib resistance again. Our
analysis still stands around possible H&S pattern. The first part of
the pattern has been completed - price gradually is entering in our
potential 1250-1267 resistance area. Following the shape of the pattern,
somewhere around the creation of right shoulder should start. Thus, our
major task right now is to understand where market could turn to the
downside and if possible catch chance for scalp short entry. 
4-hour
Here we see that our suggestion about finalizing of wedge pattern seems
correct and price finally has jumped higher with 4th leg inside the
wedge. Thus, theoretically this pattern should finish around 1260-1265
area. This is combination of wedge border, WPR1, 0.618 AB-CD target and
1.27 extension of most recent swing down. May be you can find even
butterfly here. So, let’s see how market will react on this resistance,
since looks like this will be the key to whole H&S pattern.
Market is still working on possible solid reversal pattern on daily chart. Thus, it looks like major events will follow a bit later. But right now we already can see interesting agreement between possible upward targets and Yearly Pivots in long term.
Meantime, in shorter-term perspective, on current week we will watch reaction around neckline and if it will be possible – try to catch some bearish pattern for scalp short trade.
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YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
