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There is something bullish about Gold

XAUUSD potential to reverse down trend

Gold price represented by XAUUSD has the potential to do a bullish reversal. Three elements are in place as we can see from price action:

  1. A strong support that will arrest any down move.
  2. Signs of failed breaks that verify the support.
  3. Signs of up move.
XAUUSD daily time frame chart painted with monthly boxes

See the psychology behind price action

In my opinion, those 3 elements are visible in this chart of XAUUSD in daily time frame.

 

Element of bullish reversal #1 – Strong support at $1180

We see strong support at $1180. That support was discussed clearly in my previous posts “Gold’s price action in 3 time frames and 2 strategies forward” and then “4-month down trend in gold price XAUUSD over; potential bottom setup“.

Also I followed up this with this update in Google Plus.

 

A strong support that will arrest any down move.

 

Element of bullish reversal #2 – Price fails to penetrate lower

Price is arranged in boxes by month. Down trend of Gold was very clear from August to November as can be seen by the pink boxes. Then something happened in November and December: price failed to stay below $1180.

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Failed breaks

Signs of failed breaks that verify the support.

Element of bullish reversal #3 – Price starts to build new highs

Another thing happened in December. The third sign suggesting a bullish reversal appeared. It could be a fluke some said. Maybe. But may be not if it happened again in January.

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Up move gaining attention and credibility

Signs of up move.

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Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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