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Gold MCX Rallies Ahead of Fed Outcome: A Technical Update

Gold before fed outcome 16sept15

Gold on MCX currently trading at 26278 it has witnessed a nice recovery after hitting a low of 25900 during recent bearish attempt. Gold had broken a descending trend line resistance on August 20, 2015 but couldn’t attract smart money and a nice sell off took place after printing a swing high at 27833. Prices were fluctuating just below 40 days EMA after forming a bullish cross over by 10 EMA during the month of August. Now 10 days EMA is staying above 40 days EMA that that qualifies a bullish trigger. Stochastic had reached in oversold territory and now it has formed a bullish cross and trying to recover from oversold territory. Once again stochastic has entered in oversold territory whereas prices are staying above 62% correction level of the swing that occurred from low of 24661 to high of 27833. This relation between price and stochastic indicator suggests a bullish divergence. Price action on chart maintains its bullish bias that was established by a bullish swing during the month of August this year. Any failure of 25900-25850 will hurt current chart setup and then it will try to retest horizontal supports near 25680-25400 zones and further stability below 25400 may result in a retest to 24500 and more down side. Stability above 25900 has established a bullish bias for this market and if gold manages to close above 26250-280 levels then it likely to hit 26660-26900 zones. Further stability above 27000 may bring another attempt to 27500 zones.

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