Advertisement
Advertisement
trade360
BREAKING NEWS : Start Trading Today Join Now!
Advertisement fbs

Gold Price Forecast: Indecisive market at the mercy of US dollar

Written By Mike Gleason | 2018-09-14 13:33:00 GMT

Essentially, the yellow metal has charted a doji candle on the weekly chart, which indicates indecision in the markets. This lack of clear direction is not surprising as gold's biggest enemy - the US dollar - is trapped in ranges on trade wars and risk-on-risk-of. 

For instance, the dollar index (DXY) witnessed an inverse head-and-shoulder breakout yesterday, only to trap the bears on the wrong side of the market, by rising back to 95.00. The USD seems to have picked up a safe-haven bid on US' decision to widen tariffs on Chinese goods by $200bln. 

The metal could continue its struggle for direction next week unless the USD sees a decisive move in either direction. 

Key price action during the week

Failed breakout: The falling wedge breakout witnessed on Wednesday had signaled a resumption of the rally from the recent low of $1,160. However, the yellow metal ran into offers around 50-day moving average (MA) yesterday and has fallen back inside the falling wedge, neutralizing the bullish outlook.

Rejection at 50-day MA: The descending (bearish) 50-day MA is the level to beat for the bulls as it acted as a stiff resistance this week, killing the bullish move set in motion by the falling wedge breakout.

Bollinger band squeeze: The gap between the Bollinger bands (standard deviation of +2, -2 on 20-period MA) has narrowed to three-month lows on the daily chart, meaning the daily volatility is at its lowest since mid-June. An extended period of low volatility usually paves way for a violent breakout (bullish/bearish). As a result, it seems safe to say that the yellow metal could soon witness a big move. Note that the direction of the breakout depends on the next big move in the dollar index.

Technically speaking, a close next Friday above this week's doji candle high of $1,212 would signal a revival of the rally from the August low of $1,160 and could yield a stronger rally above $1,236 (December 2017 low).

On the other hand, a re-test of $1,160 could be on the cards if the metal ends below $1,187 next Friday, adding credence to the failed breakout seen this week.

To cut the long story short, the focus is on the next week's doji candle. 

Weekly chart

Author

By Mike Gleason
tickmill

Featured Forex Brokers

Broker Profile Open Account
XM
  • Minimum Deposit: 5 USD
  • Leverage of up to 1:30
  • Leverage applies to all EU regulated entities of the group. Leverage depends on the financial instrument traded.
  • Broker Type : Market Maker
  • Regulation : CySEC,ASIC ,FCA
  • XM
    tickmill
  • Minimum Deposit: 25 USD
  • Leverage of up to 1:500
  • Broker Type : ECN/STP & STP
  • Regulation : FSA SD008
  • tickmill
    markets
  • Minimum Deposit: 100 USD
  • Leverage of up to 1:500
  • Broker Type : Market Maker
  • Regulation : CySEC
  • markets

    The Best Crypto to Crypto

    Exchanger Advantages Open Account
    binance
  • Safety Stability: Multi-tier & multi-cluster system architecture
  • Binance charges a quite low commission fee
  • Multiple-Coin Support : BTC, ETH, LTC, BNB...
  • High Liquidity
  • Multiple-Language Support
  • binance
    changelly
  • Instant cryptocurrency exchange
  • More than 500,000 satisfied users
  • Changelly charges a quite low commission fee
  • Safety Stability
  • changelly
    bitmex
  • Bitmex - Bitcoin Mercantile Exchange is a cryptocurrency derivatives trading platform.
  • Bitmex charges a quite low commission fee
  • Safety Stability
  • changelly

    Best Brokers to Trade Crypto

    Broker Profile Open Account
    XM
  • Minimum Deposit: 5 USD
  • Leverage of up to 1:30
  • Leverage applies to all EU regulated entities of the group. Leverage depends on the financial instrument traded.
  • Broker Type : Market Maker
  • Regulation : CySEC,ASIC ,FCA
  • XM
    FBS
  • Offer: 50USD No Deposit Bonus
  • Offer: 100% Deposit Bonus
  • Minimum Deposit: 1 USD
  • Leverage of up to 1:500
  • Broker Type : Market Maker
  • Regulation : CRFIN (Russia), 009069697 IFSC (Belize), IFSC/60/230/TS/12
  • FBS
    eToro
  • Offer: 1000USD Deposit Bonus
  • Minimum Deposit: 50 USD
  • Leverage of up to 1:400
  • Broker Type : STP
  • Regulation : ASIC, 335692 CFTC/NFA, 0382918 CySEC, 109/10
  • eToro

    Contact us
    Email: reviewbrokers.net@gmail.com
    Skype:fxvnpro