Gold eases from 6-year high on profit-taking / stronger dollar
Spot gold eases on Wednesday and is on track for the first daily close in red after six days of uninterrupted rally.
Profit-taking after strong rally (boosted by geopolitical tensions and strong signals from Fed about rate cut that hit new six-years high at $1438) push the price lower.
Reversal pattern is forming on daily chart after Tuesday’s action ended in Doji with long upper shadow and subsequent easing generated negative signal.
The notion is supported by optimistic news about US/China trade talks which inflated dollar, as well as technical signals as daily RSI and stochastic turned south in overbought zone and momentum weakened.
Broken psychological $1400 support remains intact and limits pullback for now, however, further easing can be anticipated.
Overall picture remains bullish and current action can be seen as positioning, with extended dips to be contained at $1380/75 zone (broken Fibo 38.2% of larger $1920/$1046 fall / rising daily 10SMA / former top of July 2016) to keep bulls intact.
Res: 1424; 1433; 1438; 1450
Sup: 1400; 1396; 1385; 1380