- Bullish bounce off 100-Day MA: Price shows resilience, repeatedly testing and holding above the 100-MA on the daily chart.
- Upsloping trend channel: Gold futures indicate a potential upward trajectory, as they rebound from the lower end of the trend channel.
- Minor support at $1968: Bulls successfully defend the previous swing high, preventing a break below this level in GC.
Recap
Our GC analysis has been spot-on since the start of these articles, and last week was no different. Today we will take a look at how the trade ideas from last week are coming into play today. Read the previous article here.
Technical analysis
100-Day MA: Price is bouncing off the 100-MA on the daily. It has hovered around it for three weeks now, and bears have been unable to break below it. This is a bullish sign, especially since it’s tested the moving average a few times.
Trend Channel: An upsloping trend channel is fueling bullish sentiment. Gold futures have recently tested the lower end of the trend channel, pointing toward likely higher prices from here.
Minor support: There is a minor support level from the previous swing high at $1968, which bulls have held GC from breaking below.
Volume spike capitulation
The candlestick from the June 15th session has a higher volume than other days and the average. Bears sold the price down in the morning and European session before the bulls absorbed all the pressure and pushed it back up, closing above the open. The increase in volume tells us this is likely the temporary bottom of this trend. When we see a high volume spike at the bottom of a downtrend, it indicates max pain, and if it reverses, it’s a higher chance than not the bottom is in. This is what capitulation looks like.
