FxWirePro: flurry of bearish patterns most likely to form gold’s double top, bulls prolong saucer in major trend
Source: FxWire Pro - Technicals / 28 Apr 2020 02:43:41 America/New_York
Over the weekend, the price of precious yellow metal has taken a halt from the vigorous rallies at the peaks of $1,738 levels but still travelling northwards that is on the verge of multi-years’ highs.
Currently, XAUUSD is trading at $1,694 levels which is just $100 away from 8-years. Gold, for the first time ever, punched through the R1m a kilogram price level. Though trading below its 2012 peak of $1,772.25 an ounce in dollar terms, the stiff resistance is observed at $1,750 areas. Gold (in the bullion market) gains considerably from the last couple of days, especially after testing the strong support at $1,445 - $1,455 levels).
But for now, gold prices have been exhausted at the peaks, technically, flurry of bearish candles (Shooting Stars, Gravestone Doji, Hanging Man & Spinning Top) signal exhausted upswings and most likely to form double top pattern upon overbought pressures.
Top 1 at 1,747.722 and Top 2 at 1,738.878 levels, the current prices slid below DMAs with bearish crossover.
On a broader perspective, the bulls, in the major trend, have been extending saucer pattern, but the upswings seems to be exhausted at 88.6% Fibonacci retracement levels upon sharp shooting star formation (refer monthly chart).
Both leading and lagging oscillators, on this timeframe, substantiate upswings.
Trade tips: At spot reference: $1,697 level, on trading grounds, boundary options trading strategy with upper strikes at $1,708 and lower strikes at $1,688 levels. One can achieve certain yields as long as the underlying spot FX remains between these two strikes on the expiration.
Alternatively, on hedging grounds, we advocated long positions CME gold contracts of April’2020 delivery, we upheld the same strategy by rolling over these contracts for May’20 deliveries as we could foresee more upside risks and intensified buying interests on safe-haven sentiments amid coronavirus pandemic and the global financial crisis.© FxWire Pro 2020. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.