IAU unable to break through key resistance level
iShares Gold Trust ETF (IAU) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
IAU ended Thursday at 15.57 gaining $0.22 (1.43%). Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (IAU as at Mar 26, 2020):
Thursday's trading range has been $0.27 (1.73%), that's below the last trading month's daily average range of $0.38. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for IAU. Prices continued to consolidate within a tight trading range between 15.33 and 15.74 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and one neutral pattern, the Doji.
Unable to break through the key technical resistance level at 15.69 (R1), the market closed below it after spiking up to 15.71 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on Tuesday, IAU lost -1.10% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 15.74 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 15.33 where further sell stops might get activated. With prices trading close to this year's high at 16.17, upside momentum could accelerate should the ETF 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 "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for IAU ETF. Out of 724 times, IAU closed higher 51.10% 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 53.87% with an average market move of 0.07%.