TEHRAN (Iran News) – Gold futures are edging higher late in the session on Monday as counter-trend traders continue to build a support base. The fundamentals are mixed during today’s session, the U.S. Dollar is up and Treasury yields are easing. But it’s a small sample so we’ll chalk up the moves as position-squaring ahead of the start of the Fed’s two-day meeting on Tuesday.
The price action also suggests that aggressive investors could be hedging their bets ahead of the Fed announcements on Wednesday. Although rising rates are likely to keep a lid on gold prices, there is always the possibility that economic growth will stall especially if the U.S. gets hit by a second wave of coronavirus or inflation takes off faster than expected.
The main trend is down according to the daily swing chart. A trade through $1673.30 will signal a resumption of the downtrend. The main trend will change to up when buyers take out the last swing top at $1815.20.
The minor trend is also down. A trade through $1738.00 will change the minor trend to up. This will also shift momentum to the upside. A trade through $1696.60 will indicate that sellers have returned.
The minor range is $1673.30 to $1738.00. Its 50% level at $1705.70 is potential support.
The market is also trading inside a major retracement zone at $1711.70 to $1787.30. This zone is controlling the longer-term direction of the market.
The short-term range is $1815.20 to $1673.30. Its 50% level at $1744.30 is the next upside target and potential resistance.
Look for the upside momentum to continue as long as the market can hold above $1711.70. A downside bias could re-emerge if sellers can take out $1705.70.
Traders should watch the price action and read the order flow on a test of the potential resistance cluster at $1738.00, $1739.10, and $1744.30.
A trade through $1738.00 changes the minor trend to up. A move through $1739.10 will reaffirm the move and taking out $1744.30 could trigger an acceleration to the upside with $1787.30 the next likely upside target.
- source : FXEMPIRE