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:
- A strong support that will arrest any down move.
- Signs of failed breaks that verify the support.
- Signs of up move.
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.
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.
Signs of up move.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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