- Bullish doji reversal may have put gold on a path to corrective rally.
- Sustained USD weakness is necessary for a stronger recovery in the yellow metal.
Gold created a big doji candle on Thursday and closed well above $1,182 (Thu’s low) on Friday, confirming a bullish doji reversal, that is, short-term bearish-to-bullish trend change.
So, it is safe to say the yellow metal is looking north, having lost 15 percent in value in the last four months.
However, the bullish doji reversal could fail to yield a stronger corrective rally in the yellow metal if the greenback – gold’s biggest nemesis – finds bids. As of writing, the USD exchange rate, as represented by the dollar index, is trading at 96.20, down 0.80 percent from the recent high of 96.98.
Meanwhile, the yellow metal is changing hands at $1,185, up 2.15 percent from Thursday’s low of $1,160.
Gold Technical Levels
Resistance: $1,187 (session high), $1,195 (10-day moving average), $1,200 (psychological level)
Support: $1,182 (5-day moving average), $1,172 (61.8 percent Fib retracement of 2015 low – 2016 high), $1,160 (Thursday’s low).
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