Gold Analysis September 2016 (D,W)
Created on Thursday, 01 September 2016 01:05
Written by Austin Galt
Price continues to trade as outlined in previous analysis. Let’s update the daily and weekly charts.
GOLD DAILY CHART
We can see the first lower high was at resistance from the 88.6% Fibonacci Fan angle which was the expectation. Price has now broken below the previous swing low, denoted by the horizontal line, so we will have a lower low. I expect price to rally shortly and make another lower high which may well be back at resistance from the 88.6% angle. Let’s see.
The RSI is oversold so a little rally would not surprise.
The MACD indicator is bearish but may need a break soon.
GOLD WEEKLY CHART
We know there is a 5 point broadening top in play and I currently favour this to morph into a 7 point broadening top which will need a point 6 low to form below the point 4 low of $1199.
It is also possible that a higher low only is made but we don’t need to worry about that now. It is just something to be mindful of.
The Bollinger Bands show price is pushing below the middle band and I expect price to do a bit more work around this band before moving lower to the lower band.
The Fibonacci Fan shows price at support from the 38.2% angle and after a little reaction higher I expect price to come back down as that support gives way.
A higher low only would likely form around support from the 61.8% angle while a point 6 low would be around the 76.4% angle.
I have added Fibonacci retracement levels of the move higher and I still favour the point 6 low scenario would l expect to form around the 61.8% level at $1172.
The RSI is looking weak while the MACD indicator is bearish and looking near the beginning of its move so nothing flash there for the bulls.
Summing up, I believe the 2016 top is in place and price is now in correction mode.