• FxWirePro: Gold bulls bank upon hammer patterns to counter double top, shrug-off shooting star – trade boundary strikes and long hedge

    Source: FxWire Pro - Commodities / 03 Jan 2019 08:59:53   America/New_York

    Technical glance: Gold’s rallies have been eventful trading sessions in the recent past to wrap-up 2018 (almost over 4.77% spike in the last month), gold price in the major trend has gone into the consolidation phase.

    Well, gold (XAUUSD price), formed “hammer patterns” at $1,201.95 and $1,238.07 levels on daily plotting. Consequently, bulls have taken-off rallies above DMAs, the ongoing buying sentiments have shrugged-off shooting star pattern also.

    Technical indicators (both momentum and trend oscillators) on this timeframe, are in conformity to the prevailing uptrend. MACD also shows bullish crossover that indicate upswings to prolong further.

    The major trend resume consolidation phase after the formation of hammer patterns at the double top neckline (refer monthly plotting). As a result, the current price on this timeframe, has spiked above EMAs with most likely bullish crossover. Both RSI and stochastic curves, also converge upwards to the upswings.

    Trading tips:On trading grounds, as stochastic curves are in overbought territory, to participate in the current uptrend one can trade this commodity with boundary options with upper strikes at 1,299 and lower strikes at 1284 levels. The strategy is likely to fetch leveraged yields as long as the underlying price remains between above strikes on the expiration.

    Alternatively, on hedging grounds, we advocate long positions in CME gold contracts for Jan’19 delivery at spot reference of $1,288/oz.

    Currency Strength Index: FxWirePro's hourly EUR is at -31 (mildly bearish), hourly USD spot index is inching towards 37 levels (mildly bullish), while articulating at 13:42 GMT. 

    For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex

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