Gold collapsed $40/oz after it broke the key support level of $1300 amid hawkish rumours that the ECB was going to begin tapering. Although finding support at 1268.40 short term momentum trading could still yield further losses as stop losses and traders are margin called. This sharp movement helped pressure the AUD and NZD lower against the greenback.
Continuing Brexit fears pressured GBP further overnight breaking to 1985 lows at 1.2730. Increasing potential for a hard European exit could affect London’s ability as a finance hub. Many clients are taking long positions hereby trying to achieve the near impossible task of picking the bottom on what will be a long and rewarding recovery trade. The UK’s economic framework suggests prices may be cheap but price collapse makes up the risk premium. Vs USD, PPP suggest Sterling is anywhere between 5% and 25% undervalued.
| Gold spot |
10/5/2016 1:06 AM |
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Trend daily chart  (=) |
Trend weekly chart  (=) |
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Gold spot Intraday: under pressure. |
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Pivot: 1287.00
Our preference: short positions below 1287.00 with targets @ 1257.00 & 1249.00 in extension.
Alternative scenario: above 1287.00 look for further upside with 1298.00 & 1314.00 as targets.
Comment: technically the RSI is below its neutrality area at 50.
Supports and resistances:
1314.00
1298.00
1287.00
1268.84 Last
1257.00
1249.00
1235.00 |
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