SINGAPORE: Spot gold looks neutral in a range of $1,641-$1,658 per ounce, and an escape could suggest a direction.
A break below $1,641 could confirm the continuation of the downtrend towards $1,614-$1,629 range, while a break above $1,657 may lead to a gain to $1,672.
Indeed, the neural zone could be expanded from $1,658 to $1,672, as signals would be rather mixed until gold gets out of the range from $1,641 to $1,672.
The bias seems to be towards the upside, as gold is consolidating within a wedge, which could turn out to be either a bottom pattern or a continuation pattern.
On the daily chart, the support at $1,638 looks stronger than expected, around which, a hammer formed on Oct. 13 and an inverted hammer appeared on Oct. 17.
These bullish reversal patterns offset the impact of the big black candlestick on Oct. 14. Chances are gold may hover above $1,638 for a longer time or even bounce towards $1,686.
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