April gold futures continued to trade once again yesterday in a narrow range closing the session at $1676.40 per ounce having initially opened at $1669.10 and posting a narrow spread up candle, as a result.
Yesterday’s price action on the gold chart continued to reinforce the waterlogged nature for gold with the current congestion zone now clearly defined by the isolated pivot high of 30th January at $1685.20 and to the downside by the isolated pivot low of 31st January at $1658.20.
As a result the price action on the daily chart is now tightening into a classic pennant formation and, as always, the longer this continues then the more dramatic the breakout, when it occurs.
This effect is analogous to that of a coiled spring and so far this week price action has been tightening between $1680 to the upside and $1660 to the downside and from the candles posted so far gold is more likely to break to the upside.
However, for any strong bullish momentum to return and be maintained the gold price has to break and hold above the critical $1700 per ounce price point.
Meanwhile to the downside, the platform of support that is most significant is in the $1640 area.
By Anna Coulling
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I am reading your articles from last two months and i found your articles profitable as i am new in Future Market. Thank you.
Delighted and just remember – baby steps!
What is your view on Euro?Will it come down to 1.20 level against US as predicted previously by many analysts?AS high Euro is not favorable for the economy of Europe and will the ECB come out with measures to bring it down to more reasonable level or will the Euro come down below 1.30 due to new problems of Spain and Italy ?
Present rally in euro is partly a result of massive short covering. Longer term euro will fall & 1.20 is as good a target as any – even parity. Short term good support on weekly eurusd chart at 1.33 – which would be first stage in any move lower. Hope this helps & thank you for taking the time to post your thoughts. It is much appreciated.