Selling very limited currently / #1,730.80 is Resistance to note

2022年7月25日

Gold's general commentary prior to past #5 sessions: The outlook remains without additional surprises, Gold is consolidating above the #1,700.80 barrier on Daily chart (#1,698.80 as an final line of defense) with the RSI on a similar pattern as the week of August #20 - #27, #2020. The critical test of the Daily chart’s Support zone was showing idle movements, as I do not give much significance at the moment, as Gold’s bias is Neutral / just at it was during the last couple of tests on March #31 and June #5 (many similarities with mentioned fractals). Note that in both cases a strong rally followed. So Gold is a Sell option either when #1,700.80 breaks on Hourly 4 chart, or Buy option when #1,730.80 - #1,742.80 Resistance zone gets tested and completes (market closing) one green candle above it (keep also in mind that Fed will gradually decrease policy tightening paths).


Fundamental analysis: Usually, out of the past #17 FOMC minutes, #16 announcements guided Gold in a Short-term rally, causing spikes on both sides (which will be the case on the aftermath), only #1 was sustainable and lead Gold on #23$ rise (#1,580.70 on November #2020). Investors will park their capital on riskier assets which may put Gold under heavy Selling pressure (evidence for that configuration is that Gold was losing value along with DX in the same manner). Similar scenario I am expecting shortly, only in opposite direction (towards #1,678.80). I cannot treat Daily chart’s Bull spikes as an movement changer nor sustainable Bullish reversal as every #5 - #10 points is considered Price-action fluctuation rather than a movement. Gold is Buying back the Price-action since DX is Trading under constant Volatility.


Technical analysis: Thursday’s session (Intra-day basis) showcased how sensitive Gold has become prior to reactions to High impact macro-economic announcements, where disappointing U.S. numbers instantly forced main correlating asset DX towards the Support of #106.400 where it was rejected and instantly Bought back, however Gold extended it’s Buying run by #30+ points towards U.S. session opening Bell. Jobless Claims missed their estimate and in addition Philadelphia Fed Manufacturing Index had widely negative effect on Bond Yields (my second correlating asset by importance) and pushed the Price-action back below #3.000 psychological barrier. That was the messenger that Gold relies currently Fundamentals more where Technicals are not immediately applied on such sessions. Information which got my attention was economical outcome (Forecast vs Actual) that CESI (Citigroup Economic Surprise Index) is currently in very reddish zone (# -60 mark) which is Lowest since #2020 Year which gives me a hint that very likely upcoming economical reports will reveal worse numbers than forecasted. However, Gold is still in Bearish territory as long as #1,742.80 Resistance holds as I will give less or no attention to Daily chart’s MACD which is giving Bullish reversal signs (since these are Fundamentally driven sessions and such #2-Month cycle will not change without serious cause).


My position: As Selling is very limited regarding Intra-day basis, #1,730.80 semi-Resistance break can fill the #1,742.80 Resistance within few hours, however don't be surprised if you see thin Volume throughout today's session and most likely I will sit this one out until favourable Trading pattern emerges. All this above shows market indecision, where Traders have the alternative not to Trade the current session. If I had to engage the order, I would Buy rather than Sell the current configuration.