Gold’s bullish breakout of a descending channel and subsequent strong daily close on Wednesday improved its near-term outlook. Market activity levels are down today due to the Independence Day holiday in the United States. Nevertheless, gold is having a breakout week.
A graph with lines and lines Description automatically generated with medium confidence
Experts trade the markets with IC Markets
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spread
Short-term Uptrend Improves Along with Long-term
Considering the early development of an uptrend, a higher swing low was completed from the June 26 low. A series of higher swing lows and higher swing highs defines an uptrend. Therefore, once the 2,369 interim swing high is busted through, the development of the short-term trend is confirmed. Wednesday’s breakout was for the larger bull trend. The first bull signal was a breakout of the channel and the second will be a rise above the 2,369-swing high. Once a breakout occurs strength is subsequently confirmed on a close above the breakout level.
Watching for Confirmation Above 2,369
A daily close above the 2,369-swing high will confirm the bullish development of the short-term trend, which is impacted by the bullish long-term trend. This week’s change to the long-term uptrend is not only reflected in the breakout of the falling channel but also the bullish breakout of the 50-Day MA and a long-term rising trend channel line. The line was recognized by the market a variety of times since early-April as either support or resistance. Wednesday’s breakout is a new attempt to follow through on the initial bullish breakout attempt in April for this long-term pattern.
Measured Move Target of 2,530
From the first record trend high of 2,431 in April, gold had risen by 447.20 points or 22.5% in 41 trading days. That advance can be split into two sections. The first advance was 201.9 points or 10.6%, in 17 days and the second advance was 285.4 or 13.3%, in 18 days. There is time symmetry between the two swings and a number to keep in mind while watching the new trend develop, if it is to continue to do so. A rise of 10.6% from the most recent swing low of would put gold at 2,530.
Other Targets
Other higher targets, above the 2,450-record high, start with a long-term Fibonacci 161.8% extended target at 2,462. That is quickly followed by another long-term Fibonacci target level of 2,480. Nonetheless, the more significant target area is a price cluster from around 2,287 to 2,488. In general, areas of confluence, where multiple indicators point to a similar price, should be watched more closely as they tend to act like a magnet to price.
Source: FXempire
