Weekly Hot Take - On the edge
19/06-23/06
Welcome friends!
Hello everyone, and welcome to another weekly hot take! This week we will discuss how metals are living on the edge of a cycle failure while there is still a good chance that we just had a massive shakeout. Let’s dive right into the analysis!
Precious Metals
XAUUSD
(Monthly)
The monthly gold chart is showing a nice pullback pattern into the EMAs. Ideally, we want a very strong bounce off of these EMAs in the next monthly candle. We also came very close to our important support level of $1923, which has to hold for the bullish uptrend to remain intact. Let’s have a look at the weekly candles now to see if we can confirm a ‘swing low’ and the ICL being complete.
(Weekly)
The weekly candles are testing the EMAs right now, and we can see that we have made a very strong bounce off of the $1923 level as expected. This last shakeout also caused an undercut of the previous low, so this means that we either had a cycle failure or this was a continuation of the decline of the weekly cycle. I think if we can regain $1974 and stay above this level, we will have completed the ICL and be off to the races. If we were to lose $1923, we would be seeing the first signs of the bears regaining strength.
(Daily)
Since we have made this wick for the daily candle, for me, this is THE line in the sand! This is, of course, lining up with the $1923 level. If the structure wants to remain bullish. I want to see gold regain $1974, followed by an attack on the ATH. I’m going to remain cautiously optimistic that this is possible here as long as we stay above $1923.
XAGUSD
(Monthly)
The monthly candles for silver show us a nice bounce off of the downward-sloping trendline as the bullish structure remains in silver. Not much new to notice here except for a nice hammer candle on the weekly and daily candles in the next sections.
(Weekly)
On the weekly chart, we see that we also had a big shakeout without breaking the previous low a couple weeks ago. This means that silver is showing relative strength compared to gold and could be a good indicator that another attack on the $26 area is being prepared. Cautiously optimistic that we are going to continue up as long as we remain above the downward-sloping trendline.
(Daily)
The daily candles show a nice higher-low, higher-high pattern, as we regained the daily EMAs after the shakeout of last Thursday. We now need to see a big push upwards to the $26 area and, preferably to break the resistance zone for the bullish momentum to continue. On the downside, the $22.70 level is a MUST hold otherwise, bears regain control.
Summary
Gold MUST hold $1923 and regain $1974 in the next two weeks.
Silver should hold $22.70 and preferably break into the resistance zone at $26
Metal bulls are on the edge of losing their strength here, which is why it would be a perfect point to turn back up for the next impulse.