Mar 05 2019

GOLD (XAUUSD) – Bulls taking charge

The research article published by MyForexEye Team on 20 December 2018 where we suggested buying the instrument at $1255 for the target of 1350, which is already met. All can find that report on the link- https://www.myforexeye.com/gold-xau-usd-completing-rounding-bottom/

Now we can see that rounding bottom is completed and ready to convert into Cup & Handle pattern where “Handle” is half complete which can be the confirmation that it will be Cup & Handle Pattern. A cup and handle price pattern reminds us shape of cup and handle where the cup is rounding bottom(mentioned above) and the handle will be “U” shaped after the rounding bottom. A cup and handle is considered a bullish continuation pattern.

Implementing Technical studies, we have analyzed that most of the indicators signaling bullishness in the pair. Stochastic slow is at 6 which indicate that the pair is highly oversold and Relative Strength Index of 14 day is at 36 (near to its oversold zone). In MACD, it is also being noticed that there is a Hidden Divergence {Green Dotted line-where price action is making higher highs and lower highs in the indicator} indicating continuation of upward movement (bullishness). Implemented Bollinger Band# also, we can see that this yellow metal is trading at lower band and is likely to take support from here(Chart 1).

On the other hand, we see that Gold (XAUUSD) is trading at strong support (Purple line) which acted very well earlier (Chart 2). Initially, it started from end of 2015 where first time prices took the support and February 2017, secondly. At this point of time Gold is trading at same support level and might take support.

Forecast- Buy Gold at 1285 for the target of 1350 and any close below 1270 will negate the above view.

#Bollinger Bands consist of a upper band and a lower band with a moving average in middle. The middle band is a simple moving average of 20 periods. Price action usually trade within these outer bands.