Trendline breakout
It appears that the trend line is being recognized by the market as gold is currently set to close at or near resistance on the line. That is the upper boundary line for a descending trend channel. Although today’s high was above the line, the trend needs further signs of strength to indicate that it could head higher in the near term. A subsequent break above 2,698 will not only signal a continuation of the short-term trend, but also provide a second break signal from the descending channel.
Bullish weekly pattern
The long-term weekly chart (not shown) is bullish, as gold broke to a three-week high this week and is expected to have its highest weekly close in seven weeks. Furthermore, the week will end strong, with gold likely to close in the upper third of the week’s price range. This is a sign of strength that could be a harbinger of further strengthening.
Reach the main turning area at the top of the canal
The current low of 2,661 is short-term support, while the 50-day MA is at 2,649 and the 20-day MA is at 2,637. Potential support around the recent interim swing low of 2,615 is important because it is a higher swing low. But it is not as important as the support at the low of 2,596 late last year, given its location in the price pattern. Since the 2,615 swing, gold has risen for four days.
However, the previous rally from the November low of 2,537 peaked after five days. It remains possible that there will be time symmetry with the current advance reaching a new high for the trend before stalling. That would complete a five-straight day streak of higher daily highs and higher lows.
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