Gold: 2016 Q1 Rally?

The usual weekly report will resume in the new year and here are some charts on the dollar and gold.

Dollar Monthly

Dollar Weekly

Dollar Daily

  • Monthly chart showing some “Oops” sign with RSI divergence
  • Dollar index remain in a good position to trade higher
  • Next target is to take out previous high and the momentum is there
  • The risk to the downside is a retest of the megaphone structure as highlighted in the daily chart
  • Last weekly candle may offer dollar bull comfort as it is a bullish engulfing candles trading well above the mid Bollinger band

Gold Weekly

Bearish:

  • Make a break and close below previous low
  • Target and attack the psychological level of $ 1000
  • Play out the potential AB = CD formation to target $ 940
  • Weekly RSI has not hit oversold level so there is every opportunity
  • Take advantage of the strong dollar to flush out gold longs
  • Low volume trading could add more volatility to take out longs

Bullish:

  • CFTC managed money remain short – giving room for short covering
  • A potential double bottom here as price action leaned on support
  • Need to break above $ 1080 to target $ 1100 in order to relieve selling pressure
  • Close to mining cost and seasonal factor could support the price action
  • Physical demand could pick up and Central Banks could add on their holdings
  • Market sentiment has leaned far too bearish
  • Open Interest saw heavy position remain in the short trade

 

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