4-year level that XAUUSD has to overcome
XAUUSD spiked today on market jitters after North Korea fired a ballistic missile over Japan airspace near Hokkaido.
Gold bulls must be pretty excited. Note however it takes time to confirm if this up move is genuine or a temporary spike only. For example, recall that markets reacted badly on 24v November 2015 after Turkey shot down a Russian warplane but recovered/rallied higher hours later.
So for all the boom and bang at the moment, XAUUSD could be back in the dumps when the US market opens in a few hours.
I think that for investors who are looking for genuine moves and willing to wait, a higher timeframe chart with a more significant milestone is required to confirm.
Separating genuine move from noise
In this 3M chart of XAUUSD from 2006 – present, we can see that since 2013, XAUUSD has never closed above 1328.
Until XAUUSD closes this quarter at the end of September above 1328, today’s move is nothing new. It could be temporary noise.
Close above 1328 end of this quarter then we have something new for the first time in 4 years, then $1600 looks like a real possibility by the end of this year and then to fight for $1900 in 2018.
If you are also looking at XAUSGD, the milestone level (since the last 5 quarters) to overcome is 1300.
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Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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