Gold (XAU/USD) Formed a weekly Inverted Hanging Man formation at the close of last week, suggesting that prices could be heading back up. With a candle formation such as this, we look for bullish confirmation at the break of the wick to the upside, which is at 1619.90 and just above the Monthly Pivot at 1606.27. For bearish continuation we look for prices to break below the outside bar to the left which has a low of 1554.50. This pair has reversed many times at this level, and considering it's relatively safe haven status on might expect to see buyers coming in strongly at this level. Could this be the beginning of the run to 2000 that so many have been anticipating for so long? Or is it just another hurdle for the bears to overcome and take the pair below the pivotal 1500? If the top side breaks look for key levels such as 1665.40 which is the 50% retracement level between the high of 1920 and the March 2011 low at 1410.10. Next the monthly R2/38.2% level waits at 1725 and then of course we have to deal with the triple top just shy of 1800, a formidable level of resistance for sure. To the south we see another consolidation zone between 1475 & 1550 offering strong support in conjunction with the Monthly S1 at 1527.50. I expect this pair might trade a bit lower first, but would be very suprised to see such a valuable precious metal fall below 1475 anytime soon.
Happy Trading!