GOLD unable to break through key resistance level
Gold (GOLD) Technical Analysis Report for Jul 11, 2019 | by Techniquant Editorial Team
GOLD finished Thursday at 1405.4 losing $15.6 (-1.1%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GOLD as at Jul 11, 2019):
Thursday's trading range has been $26.7 (1.88%), that's slightly above the last trading month's daily average range of $22.9. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GOLD.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on July 1st, GOLD actually gained 2.49% on the following trading day.
Prices are trading close to the key technical support level at 1388.8 (S1). Unable to break through the key technical resistance level at 1427.8 (R1), the contract closed below it after spiking up to 1429.4 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
Though the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the nearby swing low at 1387.5 where further sell stops might get activated. With prices trading close to this year's high at 1442.9, upside momentum could accelerate should GOLD be able to break out to new highs for the year. As prices are trading close to July's low at 1384.7, downside momentum might speed up should the contract mark new lows for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Gold. Out of 425 times, GOLD closed higher 52.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 56.24% with an average market move of 0.26%.
With four out of the other seven Commodity Markets closing higher today, the ones that stand out on the positive side are WHEAT gaining 3.09% and CORN closing 2.09% higher. On the flipside the worst performers have been NATGAS closing -0.96% lower and SUGAR losing -0.86%. Read more