GOLD unable to break through key resistance level
Gold (GOLD) Technical Analysis Report for Mar 25, 2020 | by Techniquant Editorial Team
GOLD ended Wednesday at 1642.9 losing $26.1 (-1.56%) on low volume. Trading $33.1 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. 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 Mar 25, 2020):
Wednesday's trading range has been $84.1 (5.05%), that's above the last trading month's daily average range of $66.6. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for GOLD.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 1615.2 earlier during the day, the contract bounced off the key technical support level at 1618.2 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on March 20th, GOLD gained 3.95% on the following trading day. Unable to break through the key technical resistance level at 1691.7 (R2), GOLD closed below it after spiking up to 1699.3 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move above 1698.0 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 1699.3.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 1704.3, upside momentum could speed up should the contract be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Gold. Out of 260 times, GOLD closed higher 58.46% 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 53.46% with an average market move of 0.04%.
With five out of the other seven Commodity Markets closing higher today, the ones that stand out on the positive side are WHEAT gaining 3.41% and COFFEE closing 3.4% higher. On the flipside the worst performers have been NATGAS closing -0.93% lower and CRUDE losing -0.06%. Read more