Outlook for gold looks positive, despite correction
The weekly chart clearly shown below shows the positive move higher during 2017, and this is inversely correlated with the movement of the dollar. We believe the dollar will move lower despite more expected rate hikes from the Federal Reserve this year.
Weekly XAUUSD chart
Chart: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more.
- Double trend line support comes in at $1,242 and $1,235.
- Ichimoku cloud support at $1,245.
- 200 day moving average support at $1,237.
- The 38.2% Fibonacci retracement at $1,230.
Daily XAUUSD chart
Chart source: Saxo
Four-hour XAUUSD chart
There looks to be more legs in the correction lower, but I believe this will present a buying opportunity. Ideally, I would prefer to buy after seeing a bullish reversal candle/pattern of some sort that coincides with the buying support area (the blue area on charts).
Stop: A break below $1,215.
Target: Initially $1295, then $1,375-$1,395.
Time horizon: Three months.
— Edited by Robert Ryan
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