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Gold Breaks Above The Wedge

EUR/USD

EUR/USD weakens further following a reversal from 1.1359. The pair has lost for 5 consecutive days and has more room to decline further. The mid term support at 1.111 was broken and then next price target is at 1.0968, about 150 pips from the current level. We expect a swift decline, but on the contrary the price can also consolidate and make a turn towards the upper descending channel.

XAU/USD

Following a break on the 4 hour chart, Gold rose to the upper resistance. This was in line with yesterday's comment that was mentioned in our article. If you have been following the candle stick pattern, then you could have caught this move when Gold made an upper doji on the lower wedge line, and the next candle shot up breaking the wedge and moving all the way towards 1226.

The current 4 hour candle shows another move up, by forming a similar doji right below the resistance area. If this doji is true then at the close of the candle we will immediately place 2 pending buy orders. The first one will be above the highs of the doji candle and the second will be close to the tail, we will then place our stops for both the trades below the tail of the doji incase it fakes us out. But if this present candle does not turn out to be a trend continual doji then we will short and hold till 1216.

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