Fresh bounce after repeated downside rejections generates initial reversal signal
Spot gold price rose above $1700 mark on Wednesday as global stocks are in defensive, prompting investor into safer assets.
The price is gaining positive momentum after pullback from new multi-year high at $1747 repeatedly failed to make a clear break below initial Fibo support at $1678 (23.6% of $1455/$1747).
Tuesday’s strong downside rejection which left long-tailed daily candle adds to hopes of recovery, which is supported by still bullish daily studies.
Today’s action needs close above cracked $1697/$1700 pivots (10DMA / psychological) to generate bullish signal for further recovery.
Extension above $1713 (Fibo 61.8% of $1747/$1659 pullback) would confirm higher low at $1659 (21 Apr low) and raise hopes for renewed attack at $1747 peak.
Overall picture is bullish as the metal is in the uptrend since 2015, with steep bullish acceleration seen in past nearly two years.
Fibo level at $1678 marks solid support, followed by rising 20DMA ($1659) which underpin the action.
Res: 1706; 1713; 1719; 1726
Sup: 1697; 1678; 1671; 1659