- The $2480 level has in fact offered a significant amount of resistance yet again, and it looks at this point in time as is going to take quite a bit of pressure to turn this market around and have it go breaking through the psychologically and crucially important $2500 level.
- The $2500 level probably also has a significant amount of options barriers as well, so this does make a certain amount of sense.
During the Thursday session, we get Retail Sales and the Weekly Unemployment Claims figures coming out the United States, and that of course makes a certain amount of attention paid to the Federal Reserve and what it might do. It is a bit surprising that we have pulled back, but I do think eventually we are going to finally squeeze higher, in this market could really take off to the upside.
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Technical Analysis
The technical analysis for this pair is rather bullish, despite the fact that we are struggling with such an obvious resistance barrier. The 50-Day EMA is currently sitting at the $2390 level and rising. This could be thought of as a bit of a trend line, and therefore I think you’ve got a situation where traders are going to continue to look at that as a very important support level. In fact, we have seen it offer significant support multiple times in the past, so it lines up pretty well with a continuation of the overall consolidation.
Furthermore, I can also make an argument that we are forming a bit of an ascending triangle, and that of course is something that will attract a lot of attention also. If we can break above the $2500 level, the so-called “measured move” could be for a move to the $2650 level. With this being the case, the market is likely to continue to see plenty of value hunting but given enough time I do believe that the market will eventually find some type of reason to go higher, even if it’s beyond the Federal Reserve. After all, there are plenty of geopolitical reasons out there to make gold go higher as well.
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