Gold moves into bullish area on daily
The chart on the left shows gold's daily time frame. Friday saw the precious metal close in its bullish area between the upper blue and upper red bands. It has continued to move higher today, charting a higher high and a higher low, with the caveat that the candle is still to complete. Of interest is the Bollinger squeeze (blue rectangle). Bollinger's theory suggests that band squeezes lead to expansions in volatility. Therefore, higher prices are likely if the precious metal stays in the bullish area during the expansion.
The chart on the right show's the hourly time frame. Price is held up by the R2 pivot, acting as a resistance. Nevertheless, if the stochastic can hold in the 80+ region (green rectangle), momentum will be biased to the upside. However, if it dips below 80, the R2 resistance may be too strong in the short term.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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