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Global stocks markets continue to swell in value with Japanese shares rallying higher overnight and the German Dax index still showing strength just above the psychologically important 13,000 level.
Short term
/
Buy
Trade view / 13 October 2017 at 8:19 GMT

Gold wakes up to morning star

Director / PIA First
United Kingdom
Instrument: XAUUSD
Price target: 1355
Market price: 1295
Background

This week's positive price action in gold will complete a morning star formation if prices manage to maintain gains into the close. The previous week's bullish hammer has been followed by five solid days of gains and presents a bullish outlook in the short term.

Price action faces resistance around current levels ($1295-98) in the form of horizontal and 38.2% Fibonacci retracement, however, daily momentum has turned positive and this should assist the reactionary move from the $1260 low.

A close above this previous reaction level and we should see further willing buyers entering long positions next week as the formation would then be confirmed.

The 4-hour chart has seen prices break the downward trend resistance this week and now looks support by the Ichimoku cloud.


Entry: Buy XAUUSD at current levels ($1295) & dip to $1275

Stop: Break of $1250

Target: $1335, $1355 and $1375

Time horizon: 2-4 Weeks

Charts:

Weekly chart showing morning star formation
g1
 
Daily chart highlighting resistance and momentum turning positive
g2
 
4-hour chart showing trend line break, resistance and Ichimoku cloud support
g3
 Chart source: SaxoTraderGO

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
A compiled overview of Trade Views provided on TradingFloor.com is found here
13 October
djustoe djustoe
Hey Steve, can I get your thoughts on the Dax please? Its been stuck in this 50 point trading range for the last week. It's like watching paint drive. Possibly a big move in the making, in which direction I have no idea.
13 October
djustoe djustoe
paint dry*
13 October
Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
Hi Djustoe. I agree Dax seems to have had the life squeezed out of it! Our intraday daily technicals are looking to buy dips and this shows no signs of changing. There is an obvious temptation to fade or sell into the strong current action with a stop just above the 13000 level but i do not believe this will reap any reward and is going against short, medium and long term trend. The more medium term picture looks very bullish and the 3 charts attached clarify my thoughts. Weekly chart tells me the bullish channel has a fair way to go whilst we are still not at overbought extremes. Daily chart (x2|)shows bearish divergence and overbought conditions, so warns of a correction but this could continue for some time before the correction occurs! The longer term bulls would be looking to add fresh longs on bigger pullbacks. A break and close above the 13000 psychological level should lead to an aggressive (fast) extension higher towards 13325.
13 October
m7010306 m7010306
14000 year end tgt.possible now easily.
13 October
djustoe djustoe
Thanks again for your input Steve.
4d
MSN28 MSN28
Good morning Steve. Is this idea still valid (long gold)? Any updates to your views?
4d
Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
Good morning, yes this is a short/medium term view (2-4 weeks) and i am happy with reaction so far. Initial resistance expected near $1316-20 before $1335. Dips will attract at $1295 & $1275
4d
Sarbu Claudiu Sarbu Claudiu
Good morning! Thank you for the trade idea!
3d
Morten Olby Morten Olby
Hello Steve, is the current drop in price to 1284 a dip or a change in trend? Do you still expect price to bounce back positively and go towards 1335?
3d
Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
I see this as a correction - looking to add at $1275
3d
Morten Olby Morten Olby
Thanks Steve for your fast answer, I will follow your lead :-) Best wishes for a good evening

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