The safe haven angle for trading gold continue to stay in the back seat our bounce yesterday largely a technical affair. Ahead we have a catalyst for potentially clearing the descending triangle hypotenuse or getting a rejection with US Consumer Price Index on the card at 1230GMT. Any sign of prolonged inflation pressures will make a good excuse to look for a rejection from the resistances. A negative read in the headline and core inflation numbers should see us with a bullish breakout.
Resistance
- 2378.49 – Friday High
- 2368.20 – Descending Triangle Hypotenuse
- 2359.64 – Intraday Consolidation Resistance
Support
- 2354.90 – Intraday Consolidation Floor
- 2346.18 – Intraday High / Low
- 2332.19 – Low for the week
Gold saw a strong close Tuesday holding slightly under its high. The move takes us in proximity of the hypotenuse for a daily level descending triangle even as oscillators have come off over bought levels. Intraday it could be argued we are forming a smaller lower highs in the 4H charts. With oscillators in this scale already overbought absent a breakout we will be looking for an excuse to sell. Engulfing candles taking out the support at 2354.90 in the lower time frames could be an excuse for a bearish entry or long hourly wicks off a failed attempt for an upside breakout of the triangles. We will turn bullish only if prices managed to hold above 2368.20.
