- The XAU/USD currency pair goes back and forth during the trading session on Friday to show signs of hesitation yet again, as we are hanging around the 200-Day EMA.
- It’s also worth noting that the volume will have been rather then due to the fact that Americans are still for the most part away from the office.
- Yes, technically markets were open, but it’s difficult to look at it through a prism of normalcy the day after Thanksgiving.
Gold Potential Buying Opportunity
The market is currently hanging around the $1750 level as well, so that’s also an area that a lot of people will be paying attention to due to the fact that it has been minor support and minor resistance in the past. If we were to make a significant move from this area, then it might have a bit of momentum. If the market were to break above the most recent high, then the $1800 level will be tested. A break above that level then opened up the possibility of a book to bigger move, perhaps to the $2000 level. The $2000 level obviously has a lot of emotional and psychological importance attached to it, so it’ll be interesting to see if we can run past it. I suspect that would be the longer term target.
It’s worth noting that the weekly candlestick is a bit of a hammer, so that could have longer term traders looking at this as a potential buying opportunity, and also, it’s worth noting that the hammer was sitting on top of the previous trendline, so all things being equal it looks like this market could very well continue to go higher. If the US dollar continues to lose strength, then it’s likely that we could see the gold market really take off. That being said, it does not necessarily have to be a negative correlation, because in the past there have been times were both the US dollar and gold have rallied, specifically during the 80s.
If we turn around a breakdown below the 50-Day EMA, it could send this market much lower, testing the $1680 level, then possibly the $1640 level. In that scenario, we could see a bit of a flush lower but I think a lot of what we will see is going to be in reaction to the jobs number on Friday.
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