GOLD (Futures): Gold may have hit a temporary top after collapsing off its multi-year high of 1,226.33 the past week to close lower at 1,160.96 and form a shooting star candle pattern( a top reversal signal). A similar pattern is also seen on the monthly chart(though a monthly close is required to confirm that). With that said, we are envisaging further downside risk in the nearer term with either deeper corrective declines or a lengthy consolidation of its run off the 681.72 level. On a follow-through lower of the mentioned pattern, risk should shape towards its Nov 27’09 low at 1,137.10 with a cut through there allowing further declines towards the 1,122.97 level, its Nov 16’09 high with a turn below there exposing its psycho level at the 1,100 level. On the other hand, the top of that pattern must be traded to reverse our nearer term outlook. In such case, further upside strength should build towards the 1,250 level followed by the 1,280 level and then the 1,300 level, all marking its psycho levels. Above the latter will turn focus to the 1,350 level. The pullbacks referred to in our previous analyses may be shaping up with the current rejection candle on the weekly chart. On the whole, still retaining its overall medium to longer term uptrend, a corrective pullback of that trend is now shaping up.

Mohammed Isah
Market Analyst
www.fxtechstrategy.com

This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report