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FxWirePro: Gold plummets below DMAs on hanging man and gravestone doji, bears missed-out tripe top in major trend
Gold (XAUUSD) breaks out above $1,400/mt on a perfect mix of ingredients, the gold is likely to drive up to the next strong supply zone of $1,500/mt in the long-run.
Technically, hanging man and gravestone doji have occurred at the peaks of the rallies at 1430.76 and 1425.47 levels respectively.
These candles are bearish nature that signal overbought pressures now, consequently, the price plummets below DMAs with bearish DMA and MACD crossovers. For now, the strong support is seen at 1401.55 levels, any breach below would drag the price dips up to 1382 levels.
On monthly terms, bulls break-out the stiff resistance and hamper the potential triple top formation. As a result, the current prices spike off well above EMAs with bullish crossovers, thus, we could foresee the uptrend is most likely to prolong further as both RSI and stochastic oscillators indicate the intensified buying momentum.
The buying sentiment intensifying bullion market stronger, having broken the 6-year resistance levels of $1,400/oz and having largely consolidated between $1,200 to $1,400 for the better part of three years.
On trading grounds, at spot reference: 1405, one can think of tunnel options spread strategy with upper strikes of 1410 and lower strikes of 1401 levels.
Alternatively, on hedging grounds, we advocated long positions in CME gold contracts. We now like to uphold the same strategy by rolling over the contracts for July’19 delivery as we could foresee more upside risks.
Currency Strength Index: FxWirePro's hourly EUR is at 37 (bullish), the hourly USD spot index was at -42 (bearish) while articulating (at 11:00 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex