Tuesday, July 9, 2019

Gold and Silver charts: consolidating after upward breakouts

Gold chart pattern

The following comments appeared in the previous post on the daily bar chart pattern of Gold: "...the rally has been a bit too steep. Some profit booking is likely to emerge soon."

After a sharp upward breakout with good volume support above a 'Cup and Handle' pattern, gold's price twice tested the 1440 level - forming a small 'double top' reversal pattern.

A pullback towards the rising 20 day EMA and some sideways consolidation followed. Gold's price is trading above its three rising EMAs in a bull market.  

Daily technical indicators are correcting overbought conditions. MACD has crossed below its signal line inside its overbought zone. RSI has fallen from its overbought zone. Slow stochastic formed a 'double top' pattern before dropping from its overbought zone.

The US Dollar index dropped to a low of 95.36 on Jun 25, triggering the sharp rally in Gold's price. Since then, the Dollar Index has recovered smartly past 97 - keeping a lid on further upside in price.

On longer term weekly chart (not shown), gold’s price closed well above its three rising weekly EMAs in long-term bull territory. Weekly technical indicators are beginning to correct overbought conditions. Some more price consolidation or correction can follow.

Silver chart pattern

The following comments appeared in the previous post on the daily bar chart pattern of Silver"Slow stochastic is consolidating at the edge of its overbought zone. Some price consolidation/correction can be expected."

Silver's price consolidated sideways above its 200 day EMA before forming a small 'double top' reversal pattern and corrected down to its 50 day EMA.

Daily technical indicators are turning bearish. MACD formed a small bearish 'rounding top' pattern and crossed below its signal line. RSI has dropped to seek support from its 50% level. Slow stochastic has slipped below its 50% level. Some more price correction or consolidation is likely.

On longer term weekly chart (not shown), silver's price closed at its 20 week EMA, but below its 50 week EMA and well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators are looking bullish to neutral, but not showing any upward momentum. 

1 comment:

LoganZ said...

Great analytics, thanks!