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Gold resisted and trading down but is it bearish?

Year – year trend, resistance prevails

Although as excited as most gold bulls, I did remind that year – year, gold/xauusd remains on the down trend unless 2015 high is broken decisively. This was covered previously ‘Gold bullish strong resistance overhead; year – year down intact‘ and ‘10 weeks at this resistance, time for XAUUSD to find support‘.

These are the two charts that matter most. Note the most prominent feature in these two charts is the downward equidistant channel.

GOLD XAUUSD trend, technical analysis

XAUUSD monthly chart captured on 10 March 2015

 

Here we are, weeks later.

XAUUSD weekly chart mid-2012 to present

XAUUSD weekly chart mid-2012 to present

 

‘Reversal’ story remains intact

Gold bulls should not worry excessively however. After such a blazing rally, it is likely that the current correction is driven by profit taking rather than a true sell-sell. The way I see it, something did change on the bullish side. At least on a 6-month basis, this year’s early rally did terminate the previous down trend since 2012. So all that has to happen in favour of bulls now is for a price support to be found, to make a higher low that will attract bullish entrants that will push price to a new high.

XAUUSD 6 monthly price action

XAUUSD 6 monthly price action painted in pink boxes

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

“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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