Week ahead of 26 Jan - 31 Jan

The level 1180 certainly is not giving up easy and now have created a double bottom after being tested twice in June and December 2013. Price has aggressively pushed towards 1269, last week's close after there was some indecisions around the 1235 level, the 78.2 % retracement of 1180 to July 2013 high of 1433. The 61.8 % and 50 % retracements of the same levels are at 1276 and 1306 which if the RSI breaks and holds above the resistance level at 50 are the next targets. If 1276 is cleared off, another important resistance in between might come at the level at around 1292 which is the 150 SMA (Daily). The 150 SMA has proved to be quite a resistance since the downtrend began in early 2013, has been tested several times and denied. The level 1300 is very significant in gold as it is also the 50 % retracement of the long term uptrend (2008 low at 682 to 2011 high at 1921).

This week's higher close is another higher close for the 5^th consecutive week. This is as well the highest close in two months and came close to breaching the resistance at the previous 1268 high. In MACD in weekly chart a buy signal was triggered and the RSI is confirming the move higher. The price is trading well within the rising channel in the Daily chart and has breached the previously couple of times tested but failed upper resistance line of the channel on August and October 2013. These are all encouraging early signs the lows of 1180 in June and 1182 earlier the past month are double bottom.

Fundamentally, there are going to be some very important economic data releases this week. The ones relating the US economy are Core Durable Goods Orders m/m, FOMC statement after their 2 day meeting which is expected to indicate something about the tapering, Federal Funds Rate, GDP figures, Unemployment Claims and Pending Home Sales m/m.

Trade Happy, Trade Safe :)