Gold price still has upward momentum in a down trend

As mentioned previously, EMA21 created some resistance on the upside and for the last several days has continued to do so.

There is still upward momentum showing on the daily chart, so a break above nearby resistance at 778. is not out of the question. However, as far as trend is concerned, the downtrend as indicated by the slope of the 60 day Moving Average is still decidedly down.

There is also the possibility that a decline below 721 will trigger some intense buying which could push gold up to 780. or even 800. A move higher than these figures is unlikely until the October 24th low of 681.50 is tested or exceeded to the downside.


Gold chart as at 6 November 2008 using NextVIEW Advisor

TECHNICALS

NextView RSI – declining below its’ 50 line.
Stochastic – rising
60 day Moving Average – sloping down
21 day EMA – currently containing price on the upside.
Bollinger Bands – contracting – evidence of a stall in the trend.

R1 – a resistance zone between 783- 820.
R2 – 931.50
S1 – support at 681.50

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.