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Viewing entries tagged with 'XAU'
Chart of interest - gold, technically perfect?
Good morning
Two nights ago Gold dropped sharply, stopping out many of my ‘long Gold’ clients. The move through the previous low of US$1,651.00 was particularly sharp with stop losses at that level done with significant ‘slippage’ at $1,647.00. That slippage tells me, quite clearly, that my clients were not alone and the market on the whole was caught out on the drop (caught long).
This is classic market behaviour. If market participants are all sitting long then they are sellers on their next transactions, thus inhibiting moves higher. Now a large amount of those longs have been forced out. Clearly the implication to me is that the market is now free to move higher…….
With that in mind take a look at the chart.
1) The move down from the US$1797 high to the $1625 low was a prefect ‘Fibonacci’ 61.8% of the previous rally ($1527 to $1797).
2) The latest 3 week pull back is again a perfect ‘Fibonacci’ number, this time a 76.4% move (my favourite ratio which I have observed often occurs before big moves – the depth of the move often confounding the most ardent bull – as is my base case here).
3) Yesterday’s low stopped on the rising trend line from the aforementioned lows.
Big picture
XAUUSD – click here to view chart
A closer look
XAUUSD Closer Look – click here to view chart
No doubt this analysis is all a bit over the top for most of you but the end result could be a good buying opportunity with clear trading parameters if you are a gold bull (USD bear) like me.
G.
USD/JPY and JPY crosses - is this the retirement trade?
All
The USD/JPY has attained the state that I refer to as ‘trending’. Price pushing up hard and fast against spaying Bollinger Bands . The ‘morning star’ rejection of lower levels that I documented on the 10th of November has been a wonderful indicator.
From observing this technical state in the past I’ve noted that ‘pullbacks against the trend can be quite sharp but they are usually brief by time’ (24/48 hours).
This pair, in my opinion has been incredibly depressed for a number of years, and it could really fly going forward. Why not 100+?
For a bit of perspective (and showing my age) this pair was at 250.00 when I started in FX and had been at 360.00 in the late 1960’s.
USDJPY – click here to view chart
What about Gold (the store of value as central banks globally attempt to inflate their way out of trouble) versus the JPY? Check the 1 year consolidation break out!
XAUJPY – click here to view chart
And NZD/JPY ? The Christchurch rebuild will make NZ’s economics look unlike any other western economy and on the other side of the ledger Japan’s problems (which I’ve documented many times recently) undermines the JPY. 100 on this cross anyone?……………………….and you get paid to hold it!
NZDJPY – click here to view chart
A trade weighted type portfolio of each of these pairs may be vastly rewarding going forward.
G.
