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Gold Technicals – Remain Within 1,255 – 1,265 But Price Far From Stable

No real development in Gold prices as we continue to trade within a 10 USD range between 1,255 – 1,265. Prices have been staying in this range for most of this week’s trading despite global stocks having a clear bearish direction on Monday and a clear bullish direction yesterday.

Hourly Chart

XAUUSD_070214H1 [1]

This highlights the strength of 1,265 as a resistance and 1,255 as a support. With Stochastic currently within the Overbought region, there is a high likelihood of prices pushing back towards 1,255 support. However, traders who want to trade the current theoretical bear swing need to realize that prices managed to push lower beyond 1,255 and above 1,265 in the past few days, which implies that volatility is rather high. As such, traders will need to place wider stop loss levels as prices can in theory move as high as 1,275 and back without invalidating the sideways trend. This also means that there likelihood of “fakeouts” are high, and traders aiming to play a break of 1,265 or 1,255 following NFP announcement will need to be aware of this increase probability. Considering that NFP historically doesn’t rally inspire lasting follow-through but merely add “noise” in the short-term, one wonders if such a play is worth the risk.

Daily Chart

XAUUSD_070214D1 [2]

Daily Chart doesn’t really give us any new insights either. Prices remain below the previous swing high on 1,279 and above 1,250 support, and that is not particularly useful as the bullish recovery from 1st Jan can be regarded to be still in play yet the same could be said about the bearish pullback that started on 27th Jan. Stochastic indicator doesn’t do much either – Stoch curve pointing higher after rebounding off 35.0 “support” but remains below 60.0 “resistance”. This coupled with short-term uncertainty compounds the difficulty in trading gold currently, and conservative traders may wish to stay out until market has calmed with clearer direction in sight.

More Links:
S&P 500 – 1,770 Key Resistance Reached After Strong Rally [3]
Natural Gas – No More Cold Air To Blow Prices Higher [4]
WTI Crude – Staying Mildly Bearish Despite Yesterday’s Rally [5]

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.

Mingze Wu

Mingze Wu [10]

Currency Analyst at Market Pulse [11]
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu
Mingze Wu

+Mingze Wu [14]