Top three charts of the week: GOLD, US100, GBPUSD

14:32 6 November 2019

Summary:

  • Potential reversal harmonic XABCD pattern on US100
  • Gold is trading in consolidation range
  • GBPUSD pulls back from 1.3000 handle

GOLD

GOLD has been trading in a sideways move recently. The upper limit of the consolidation lies at $1517 and the lower limit can be found at $1474. The support coincides with lower limit of the Overbalance structure, marking the biggest correction in a whole upward move started in August 2018. According to the methodology, as long as the price is above the $1474 handle, the main trend remains upward. Only a break lower could trigger a bigger downward correction. In such a scenario, the gold price could fall towards 38.2% Fibonacci retracement. On the other hand, a break above the topside resistance at the 1517 handle could pave the way towards the YTD highs at $1555.

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GOLD D1 interval. Source: xStation5

US100

The US stock market index, Nasdaq (US100), reached fresh ATH yesterday. However, the index is trading near a key resistance area now. The zone at 8280 handle is marked with the potential reversal point of harmonic XABCD structure - Butterfly. The formation is additionally bolstered by the range of upward movements marked with  purple lines. A rebound from this resistance may lead to a bigger downward correction move. In such a scenario a 100% Fibonacci retracement should be considered as the nearest support. On the other hand, a break higher could see upward move accelerate and in such case 161.8% Fibonacci retracement could come into play.

US100 D1 interval. Source: xStation5

GBPUSD

Last but not least, let’s take a look at the GBPUSD currency pair. Market is waiting for the UK elections scheduled for December but looking at the daily interval, one can see that the pair has a problem with breaking above the 1.30 handle. A downward correction could be on the cards but it is not a sure thing. However, if this is so, the pair has a lot of room to fall. The key support lies at 1.2620 handle and is marked with the lower limit of Overbalance structure as well as 38.2% Fibonacci retracement. On the other hand, should buyers bring the pair above 1.30 handle, GBPUSD could eye a test of the resistance levels at  1.3170 and 1.3350. 

GBPUSD D1 interval. Source: xStation5

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