The $1706-09 area is home to some key technical support targets
The price of gold moved to the highest level since November 2012. Today the dollar is moving higher and that has sent the price little lower in trading today.
Technically, looking at the hourly chart below, the price high yesterday also fell short of a topside channel trend line. The inability to extend to the line disappointed traders, and coupled with the higher dollar today, the price has moved modestly lower.
The low price today at $1708.29 moved just below the low price from yesterday at $1709.18. Moreover there was a more recent low in the New York session at $1709.67. As a result a floor between $1708.29 and $1709.67 is being established.
Just below that level sits a upward sloping trend line (going back to April 1) and the 100 hour moving average (blue line in the chart below). The 100 hour moving average comes in at $1706.18. The trend line is just above that level. The last time the price of gold traded below its 100 hour moving average was back on April 2. The price at that time was around $1604. With the current price currently around $1720, the price is $116 above that moving average level at the time of the last break.
As a result, a break below the cluster of support defined by the low over the last 2 days at $1708.29, and the trend line and 100 hour moving average at $1706.18 is still needed to shift the bias more to the downside for the precious metal. Failure to do that and the buyers still remain in control.
If the cluster of support can be broken, the next downside targets come in at the 38.2% retracement of the move up from the April 1 low. That level comes in at $1679.26. Below that level, in the rising 200 hour moving average at $1675.38 would be the next key target. Like the 100 hour moving average, the last time the price closed an hourly bar below its 200 hour moving average was back on April 2 as well.
Gold buyers are still more in charge. However traders will be eyeing a further move to the downside and the key support targets for bias clues..
