The Previous Resistance Turns Into Support for Gold - Forex News by FX Leaders
Gold continues to stretch higher

The Previous Resistance Turns Into Support for Gold

Posted Monday, August 26, 2019 by
Skerdian Meta • 1 min read

Safe havens are on a bullish roll. They have been attracting really strong bids from traders as they diverge from risk assets and instead, pile on into safe haven assets. As a result, USD/JPY broke below 105 for the first time this year today after opening with a bearish gap, while GOLD opened with a bullish gap higher.

Gold has been on a bullish trend for a long time now and the 50 SMA (yellow) was providing support two weeks ago, while last week it was the 100 SMA (green) which was providing support. Gold bounced off the 100 SMA at the end of last week as the sentiment deteriorated again.

Today, the bullish gap took Gold above the previous high which stood at $1,530s, taking us to $1,555. The sentiment improved somewhat during the European session as Trump softened the tones on China today and Gold retreated lower. But, the previous support zone at $1,520-30 turned into support and it has ben holding during the European session.

The price formed a small hammer candlestick in the previous period on this time-frame which is a reversing signal, so we might see Gold bounce off this previous resistance zone which seems to have turned into support now. This might be a good chance to go long on Gold, but stochastic is still heading down so we will wait a bit longer.

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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