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Tuesday, February 7, 2017

Gold and Silver charts: bulls overcome resistance zones

Gold chart pattern


The daily bar chart pattern of Gold faced strong resistance from the 'support-resistance' zone between 1200 and 1220 (refer previous post) and dropped below its 20 day and 50 day EMAs to 1180 on Jan 27.

An overbought Slow stochastic was expected to trigger a correction - and it did. A sliding US Dollar index led to a sharp recovery that propelled gold's price past 1220 and its 200 day EMA into bull territory on Feb 6.

All three daily technical indicators are looking overbought, and showing negative divergences by failing to touch new highs. Some consolidation or correction is likely.

However, with the US Dollar index expected to correct a bit more, gold's price can move up to the zone between 1250 and 1260.

On longer term weekly chart (not shown), gold’s price has closed above its 20 week and 50 week EMAs but below its 200 week EMA in a long-term bear market. Weekly technical indicators are turning bullish. 

Silver chart pattern


The daily bar chart pattern of Silver faced strong resistance from its 200 day EMA and corrected to an intra-day low of 16.6 on Jan 27, but closed higher (above 17.1) - forming a 'reversal day' bar.

On Jan 31, silver's price followed the yellow metal's lead in crossing above its 'support-resistance' zone between 17 and 17.50 (refer previous post), and closed above its three EMAs in bull territory.

It has since been consolidating sideways with a slight upward bias. Daily technical indicators are bullish, but Slow stochastic is showing negative divergence by failing to move higher.

Some consolidation can be expected before silver's price can move up to the zone between 18 and 18.50.

On longer term weekly chart (not shown), silver’s price has closed above its 20 week and 50 week EMAs but below its 200 week EMA in a long-term bear market. Weekly technical indicators are looking bullish.

1 comment:

Subhankar said...

Gold Prices and U.S. Dollar Correlation - 10 Year Chart

http://www.macrotrends.net/1335/dollar-vs-gold-comparison-last-ten-years