Gold News Update - 4 October 2018

COMMENT:
XAU/USD popped above the 55 Day moving average but found resistance at $1208.70 (23.6% Fib) for the second successive day, suggesting that there is some “wood to be chopped” at that level. The market remains trapped within the broader sideways trading range between the Aug 24th low at USD 1183.20 and the Aug 28th high at USD 1214.85 but is progressing into an ever-decreasing triangular congestion zone bounded by USD 1183.20 and the downtrend resistance line. XAU/USD needs a close above its 55 Day moving average (1202.95) but more importantly, a move and close beyond the downtrend / resistance line (USD 1212.55) and the August 28th high ($1214.85), which will signal that the market has ‘broken out’ which should then draw in the momentum buyers / trend following specs.

COMMENT:
Another strong day for XAU/AUD yesterday as the market moved well beyond the downtrend resistance line that had kept it in check since it topped out near the start of May. If XAU/AUD can post another strong positive day today and close at or near the high, then a candlestick pattern known as ‘Three White Soldiers’, a bullish candlestick pattern that predicts the reversal of a downtrend, will have been posted. The pattern consists of three consecutive long-bodied candlesticks that open within the previous candle's real body and a close that exceeds the previous candle's high. As mentioned, trendline resistance has been breached and now the technically significant 200 Day moving average (1691.40) is well within sight. Dip buying into any weakness is the preferred trading stance and should the market post the aforementioned ‘Three White Soldiers’ pattern, then it would definitely be a case of “Blue Horseshoe likes XAU/AUD”. Back up the truck.

COMMENT:
A couple of successive Doji candlesticks have been posted as XAG/USD stalls around its 55 Day moving average. However, dip buying on any weakness / mean-reversion potentially as far back as the USD 14.32 - 14.37 region remains the preferred trading stance with XAG/USD still having some meaty upside technical targets at USD 15.19/15.23, 15.47, 15.63 & 16.03 in sight.

COMMENT:
A nice session of back-filling / technical consolidation and advance for XAG/AUD yesterday and upside targets at $20.88 and $21.30 are still in play. Dip buying remains the preferred trading stance.