Gold Eases on Profit Taking - 31 May 2017

31 May 2017 8:00:45 AM


Gold prices ended Tuesday’s session moderately lower as lack of bullish fundamental developments prompted some investors to lock in gains from a recent rally to a four-week high. The failure to pass through $1271.50-$1269 also weighed on the market. XAU/USD failed to break through this barrier for the third time in a row, and this fueled downside momentum. The market looks as if it will revisit the support right below at $1259, where the daily Tenkan-sen (nine-period moving average, red line) sits, today.

We have bullish Teknan-sen - Kijun-sen (twenty six-period moving average, green line) crosses on the weekly, daily and 4-hourly time frames. In addition to that, the market is residing above the Ichimoku clouds on the weekly and 4-hourly charts, indicating that the bulls still have the medium-term technical advantage. However, as I pointed out earlier, the upside potential will be limited unless the resistance in the 1271.50-1269 area is broken. XAU/USD has to anchor somewhere above 1271.50 in order to tackle the resistance in the 1277.35-1276 zone. A clean break out above the 1277.35 level would signal a further extension towards 1283/2.


If the market drops through 1259, the market will probably retreat to 1256.50. The top of the 4-hourly Ichimoku cloud stands at 1254, so we need to get down below there to make a move to the 1251/0 zone. Eliminating this support is essential for a continuation towards the key support at 1245, the bottom of the daily cloud.

XAU/USD Weekly

Alp Kocak has been trading Forex since 2003. He writes technical analysis based on Japanese candlesticks and Ichimoku Kinko Hyo.

DailyForex Newsletter
0 User Reviews

Registration is required to ensure the security of our users. Login via Facebook to share your comment with your friends, or register for DailyForex to post comments quickly and safely whenever you have something to say.

Log in | Create a Account Now