September 2011 was an exciting and an interesting month for gold trading. All time high was established at 1921.14 on 6th September 2011. The formation of this second peak heralded a potential double top chart pattern which was confirmed when the support at 1703.13 broke on 23rd September 2011. As swiftly as the double top confirmation was proclaimed a new trough was formed the next trading day 26th September 2011 at 1532.80 at the violet support zone as indicated on the chart.
The seed of a new potential upswing was thus planted at the tail pivot of the giant hammer candlestick bar. The struggle to advance was met with strong resistance at the red channel zone and the testing of the violet support channel has proven that a break below the violet channel will signal a potential major fall in gold price.
As the Eurozone crisis persists gold regained its upswing momentum and emerged above the red channel zone into the green double top support channel area. A successful challenge above this green channel will see imminent resistance at the blue channel region. A Golden Christmas and Glittering New Year awaits only if a strong upthrust decimate the bears stationed here.
A retest of 1921.14 all time high is back in play if the blue bears are defeated. 2012 will then see gold price approaching the brown upper channel at 2000 and above.
Conversely, if the current support at the green channel gives way a retreat downwards back to the red channel is expected. Strong support can be found at the violet channel region. A breakdown from this strong support area will plummet gold price towards 1500 and below.
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