FxWirePro: Spinning Top and Gravestone Doji Patterns Hamper Gold’s Bullish Momentum, Can Duos Develop Triple Top?

Although Gold (XAUUSD) has recently broken out above $1,400/mt level on a perfect mix of ingredients, the gold is driving up to the next strong supply zone of $1,450/1,500/mt in the long-run. 

Technically, spinning top and gravestone doji have occurred at the peaks of the rallies at 1423.48 and 1418.67 levels respectively.

These candles are bearish nature that signals overbought pressures now in the minor trend, consequently, the price plummets below DMAs with bearish MACD crossover. 

For now, the strong support is seen at 1380 levels, if bulls manage to hold these levels, then the uptrend likely to resume.

On monthly terms, bulls break-out the stiff resistance and hamper the potential triple top formation (refer monthly chart). 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 amid mild weakness in the minor trend as both RSI and stochastic oscillators indicate the intensified buying momentum. 

The buying sentiment is seen in the bullion market stronger on this timeframe, 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: 1404 level, one can think of tunnel options spread strategy with upper strikes of 1410 and lower strikes of 1392 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 August’19 delivery as we could foresee more upside risks.

Currency Strength Index: FxWirePro's hourly EUR is at 99 (highly bullish), the hourly USD spot index was at -25 (mildly bearish) while articulating (at 11:05 GMT).

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