Overview:- Bulls have become too aggressive after providing the breakout of $1820 level, today in the morning session gold has made a high of $1945 level like a cake walk which is a life time high with a breakout of year 2011, well now sky is the limit.
In our previous report also we mentioned to buy the gold around $1850 and our targets were $1890 and $1920 level which have been achieved smoothly. Well the way pair is trading and sustaining it seems like bulls will arrive at the $2000 level in the coming trading session. The short term to long term trend is up so in an uptrend market, buy on dips which will be a profitable strategy. The way bulls are reacting it seems like they are approaching the $2000 level in the near term. On the contrary if gold trades and settles below the $1900 level then we may see selling pressure till $1860-1820 level support zone.
Technical Analysis: – From a technical perspective, we can see that an uptrend line is lying which is providing us a bullish signal. Overall it is trading above all the major and minor EMA lines and favoring the bulls. From a longer-term perspective, we can see on weekly as well as monthly chart a rounding bottom pattern has been completed which means first phase of bull run has been completed.
RSI has arrived above70 level and providing full strength to bulls, which is a purely overbought territory so some correction can’t be ruled out but these corrections should be taken as buying opportunity. Odds are in favor of bulls and daily to weekly bias remains bullish on gold as long as $1800 level remains intact on a closing basis. A bullish crossover on the MACD is also supporting the bulls on the daily chart. Also, bulls are playing at the front foot for the time being and it seems like bulls are going to continue with this game and will not provide any chance to bears. The $1870 level can be considered as a key support level followed by $1820 where $1980 is a key resistance level followed by $2000 level.
Trade idea:- Based on the chart and study above we would suggest that traders may go for buy at $1920 for target of $1960 and $2000 level with a strict stop loss of $1890 level on a closing basis.
