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Gold Forecast Video for 22.06.23 by Bruce Powers
Gold dips to test support near the lower boundary of a developing falling wedge. Once a low of 1,919 was seen at today’s low buyers stepped up to drive gold off that low. The high of the day tested the 100-Day EMA as resistance and it held. Today was the first test of the 100-Day line as resistance since the consolidation around support of the 100-Day EMA began almost a month ago.
Bullish Doji Hammer Candlestick Shows up on Wednesday
Nevertheless, gold is on its way to ending the day with a bullish doji hammer candlestick pattern. Therefore, once complete a decisive advance above today’s high of 1,939 provides a bullish signal. Gold then heads towards the top trendline of the wedge to test it as resistance. If it breaks through a daily close above the line will confirm strength. However, it really needs to close above the latest minor swing high at 1,968 to provide greater confidence that it has the potential to keep rising from there.
Since the hammer candlestick is occurring inside a consolidation pattern, it could just signify the bottom of the pattern at this time, rather than the bottom of the trend. Following a rally, if it comes, another test of the lower trendline of the pattern is possible. But it is less likely following a daily close above 1,968. Regardless, the two trendlines around the boundary of the pattern are solid since each is touched by price three times, or close enough.
Another Test of Lower Boundary of Pattern Possible
If the pattern continues to evolve with price staying within the lines another test of the lower line is certainly possible. And if gold keeps falling below today’s low, it will be relatively close to two key potential support areas. The first being the 61.8% Fibonacci retracement at 1,912, followed by the 200-Day EMA at 1,895. Of course, the 200-Day line is the most significant as it represents the long-term trend. Gold tested the 200-Day line in the first quarter of this year and price was clearly rejected with a double bottom pattern. On a relative basis, a bullish reversal prior to gold reaching the 200-Day EMA, would show improving strength since the earlier test reached the line.
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This article was originally posted on FX Empire
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