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Dovishness in the minutes of the Fed's July policy meeting softened the US dollar, and gold is climbing back towards a test of key resistance partly on 'stranger and stranger' developments in Washington.
Medium term
/
Buy
Trade view / 18 June 2017 at 23:05 GMT

Outlook for gold looks positive, despite correction

Director / PIA First
United Kingdom
Instrument: XAUUSD
Price target: 1375-1395
Market price: 1255
Background: upbeat weekly trend

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.

The ascending triangle is a bullish formation and offers a measured move target to $1,394.

Weekly XAUUSD chart
g1

















Chart: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more.

Daily chart trend

The daily chart shows solid resistance at $1,295, having rejected this level twice this year. 
The three black crows pattern shown in the chart confirms a rejection of the last attempt to break the psychological $1,300 area.

The spike higher on the June 13 failed to be sustained and the trend lower has resumed although there are plenty of supportive levels, as follows:
  • 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 chartg2













Chart source: Saxo


Four-hour chart

The four-hour chart hints at a typical AB=CD correction after the five wave impulse move from the low on May 9 ($1,215).

The measured move target coincides with a 50% Fibonacci retracement at $1,244-$1,245.
Notably, the 61.8% Fibonacci retracement ($1,245) of the May rally also lines up with this level and the daily levels above.

Four-hour XAUUSD chart
g3
Chart: Saxo Bank

Conclusion

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).

Entry: Buy a dip around $1,245.

Stop: A break below $1,215.

Target: Initially $1295, then $1,375-$1,395.

Time horizon: Three months.

— Edited by Robert Ryan

Non-independent investment research disclaimer applies. Read more
A compiled overview of Trade Views provided on TradingFloor.com is found here
19 June
Morris Morris
Hi! Steve. I like it reason being that this decision should be supported by at least two factors i.e. Fibs and candle formation! Could make it stronger if we have RSI buy divergence as well. Good Stuff.

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