Overview:- By analyzing the daily technical chart we can see that primary and secondary both trend are showing upside moment which suggest us to collect the gold on every dip the short term bias remains bullish as long as $1500 level remains intact whereas the intermediate term trend remains bullish as long as gold is trading above $1470 level. For the record, gold rose to a new six year high this week although it fell in three consecutive sessions. However hope is not over yet and some profit booking at these level was expected.
Technical Analysis: – From technical prospective we can see that an uptrend line is lying on the chart and providing full strength to the bulls. This week after marking the high of $1550 level bulls could not sustain at that level and we can see roller coaster move from intraday point of view where on very next bears took the charge and took the pair at $1516 level. Presently at the time of writing bulls are trading at $1529 level which shows that bulls are again taking the chart and we are expecting a valid breakout of $1550 level. If bulls trades and sustains above $1550 on daily basis then $1600 level is not far away from here. The parabolic SAR dots with green color at the downside of the candles are favoring the bulls.
The expansion of Bollinger band is also suggesting us that volatility is about to come in the pair and chances are very high that we may see towards upside. A divergence on the RSI is suggesting us to wait for the a dip and a bearish crossover on MACD indicator is also supporting the RSI and generating some signal of buy on dips. The short term to intermediate term trend is up so in an uptrend market buy on dips will be profitable strategy so here some correction or profit booking can’t be ruled out.
Fundamental Analysis: – Gold always thrives on bad news, and there’s plenty of scope of disappointing news ahead, from the ongoing trade war to potential for dismal Euro Manufacturing or retail sales data. That’s not yet taking into account new US tariffs that come into force from September.
What next:- The bulls are leading in the game and playing at front foot and it seems that bulls are going to continue with this game and will dominate the bears in near term with full of pace. The way bulls are reacting it seems like there is no hope for downside,. A daily closing above $1550 level will open the way towards the $1600 and $1650 level in coming week. The $1550 level is psychological level for bulls and as long as bulls will sustain above the $1500 level bulls will receive more demand pressure. bulls are trading and sustaining above major and minor EMA & SMA lines which is providing strength to the bulls. Further buying is still awaited above $1550 level once bulls take the charge then they are not going to stop above that level.
Trade idea:- Based on the chart and study above we are expecting that go for long on the gold at $1520-25 level for the target of $1570 and $1600 level with the tight stop loss of $1490 level. Odds are in favor of bulls and we will keep our bias bullish on the gold as long as $1500 level remains intact. The $1500 is the key support level followed by $1480 level whereas $1580 is key resistance level followed by $1600 level.
