Yesterday’s weakness in USD provided relief for commodities across the board which have been battered by the sudden resurgence of USD in 2013. Gold was a happy recipient of the relief, pushing more than 50 USD per ounce on the trot and tested 1,400 towards the end of the US trading session. However, the move was rebuffed quickly, but the strong underlying bulls managed to muster up another attempt during early Europe session, but ultimately failed once again.
Price is currently reversing heavily, seeking to test the interim support around 1,385. What is more disconcerting for the bulls is the 3 Black Crows bearish reversal pattern which may signal a full bearish turnaround and push price towards the descending trendline. Stochastic readings suggest that price is currently in a bear cycle, which is in line with what the 3 black crows symbolize.
Historical Open Orders
Using Historical Open Orders, we are not seeing an immediate buy orders below current price levels, suggesting that the bearish reversal may have free reign to push lower until around 1,370 where the number of buy orders accumulate. Even so, the concentration of buy orders isn’t high, and it will not be surprising to see price break the interim support with ease. Nonetheless, direction today and also for the rest of the week hinges largely on the direction of USD which in turn hinges on the direction of US stocks. Should US stock continue to suffer a technical pullback, the weakening USD may help the interim support to resist further declines, and instead push prices higher up. Looking at the number of sell orders above current levels (or lack thereof), the journey higher should be equally easy especially if the swing in USD strength is strong.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.