Forex Price Action – Gold Posts Outside Bar At Yearly Highs | Oct. 1st
After forming a pin bar rejection off the dynamic support and 20ema last week, the precious metal has made a few attacks on the yearly highs and key resistance at $1790. Today the metal posted an outside bar and this one represents a lot of two way price action with rejections on both sides and only a modestly bullish close.
Short term, this means there is a trading range in play at the highs and lows of the outside bar so intraday traders can look for plays on both ends. But the fact it is holding towards the upper end of this recent consolidation suggests upside pressure and likely breakout soon. Bulls can wait for a breakout pullback setup above the $1790 level while bears can take shorts close to the highs with tight stops above.
Global Market Commentary:
US manufacturing took center stage today as activity for Sept. grew for the first time since May. Along these lines, Germany’s PMI also rose last month to its strongest print since March.
But on the other side of the world, Chinese factory activity contracted signaling a further loss for momentum. Also on the bearish side of things was Spain which announced within days after disclosing its Austerity Budget that it will miss its revised 2012 targets. One has to ask…how does that work out?
Regardless, the Chicago Fed official Evans spoke today talking about more easing to support the US economy and precious metals took off, with Gold jumping $25 in a couple hours and Silver gaining about $1.
They both retraced some of the gains closing at $1777 and $34.75
The Dow gained about 78pts on the day.
Asian markets will be slightly less liquid with it being Golden Week in China.
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