GOLD Price Analysis: The Bullish Reversal

Posted by John Kelvin on Oct 23, 2019 5:41:48 AM

Is the Brexit news still driving price higher? Prices maintained their levels last week. Which previous news drove the price?

On Tuesday, U.K. lawmakers rejected the government’s proposed timetable for passing legislation to ratify Prime Minster Boris Johnson’s deal to depart from the EU.

Another Brexit delay is expected now after the parliamentary defeat, but most traders are optimistic that the worst case scenario, which is the U.K. leaving the bloc without a deal, may be avoided.

On the Sino-U.S. trade front, Chinese Vice Foreign Minister Le Yucheng stated this week that Beijing and Washington have made some progress in trade talks, adding that as long as both sides respected each other, all problems were resolvable.

Some expect U.S. President Donald Trump and Chinese leader Xi Jinping to sign the first phase of a trade agreement at the Asia-Pacific Economic Cooperation summit in Chile in mid-November.

Unrest in Hong Kong also received some attention, after the Financial Times reported overnight that Beijing is considering replacing Hong Kong’s chief executive, Carrie Lam, by March. What effect does this have on price?

gold ananlysis

On the daily chart, the price of Gold has consistently continue to form a chart pattern called the diamond bottom pattern after testing the high price at $1557 price, pulling back down to reach $1460.

What is a diamond bottom chart pattern?

A diamond bottom is a bullish trend reversal chart pattern. It's known to be tough to spot.

The diamond bottom is formed by two juxtaposed symmetrical triangles, which results in the formation of a diamond. The shape looks like a diamond, but usually one tilted to the side. The touches/test of the trendlines used to draw the diamond are very important as well. Prices must touch each trendline once or twice. As mentioned earlier, the diamond bottom is a bullish reversal chart pattern and has 72% chances of breaking out to the upside. A diamond bottom’s price objective is calculated by plotting the maximum height of the diamond at the exit point.

Technical analysis suggest a bullish price continuation to test $1536, as price has broken out to the upside of the pattern.

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