After the bold attempt to breach the main support for the general upside wave on July 28, trading returned to trade to the upside supported by the formation of a falling wedge where gold breached its resistance which helped push the metal higher as seen on the daily chart above.
The short term upside wave which started from the bottom at 1156.80 is structured within an ascending channel where the metal neared its resistance yesterday and currently reversed in an attempt to retest the critical resistance previously breached at 1218.00; the descend is supported by overbought pressures on momentum indicators. The downside move is expected to be temporary to unload negative momentum before resuming the short term bullishness. Therefore, we expect the metal to fluctuate descending towards 1218 or 1213 utmost and then resuming the upside wave targeting next 1237.00 and then further higher towards the previous top at 1265.00. The 100 Days MA supports the upside wave and protects it from below while daily closing above 1204.00 is required to keep our expectations intact.
By: Yasir Mubarak
Senior Technical Analyst