Chart of the Day – Gold
James Chen from FX Solutions at 10/22/09
10/22/2009 – Gold – Price action on spot gold, a daily chart of which is shown, has formed the appearance of a pennant pattern consolidation after reaching new all-time highs last week. This potential continuation pattern occurs within the context of a strong continuing uptrend. The all-time highs that were reached last week, just above 1070, represented a 161.8% Fibonacci extension of the prior bullish run. On the latest bullish run that represents the pole of the pennant pattern, the important 161.8% Fibonacci extension resides around the 1125 level. As gold would be in uncharted territory if it breaks out above the pennant and the 1070 high, in the absence of any further precedented resistance levels to the upside, the 161.8% Fibonacci level serves as a high-probability price target. This is, of course, provided the pennant actually turns into a continuation pattern and last week’s all-time high is broken. Immediate downside support within the context of the current consolidation resides around the level of the pennant’s lower border, which is in the approximate vicinity of 1042-1043.
* Visit my forex tips and techniques blog here: http://fxpath.fxstreet.com *
IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors.
