Forecast - 2012-12-20

I had posted on December 6th about the possibility of Cup and Handle pattern for EURUSD pair.
One thing that I missed is that the rebound happened around 50% fibo, not 38.2% as I had predicted.
But the whole scenario seems right, EUR is moving up to the highest level since April 2012. Cup and Handle pattern happened perfectly.

I also mentioned in that post, if gold broke the purple support (which it did), it might go to 1665-1675 area. And that also happens right now.

The question is, how deep will gold go south?
To get the big picture, I will have to use daily chart. Look at the chart below

The first support for this time is the white line support, which has been acting as the support lines from May 16th, 2012 . This line seems quite solid for me. Just look at how many times it supported the price (white small arrows). Most likely in my opinion, this white line will be the limit of this downtrend.
But if gold breaks this support, we still have the second support around 1630 area. Just look how strong that line (area) as the support and also resistance from Mar 14th, 2012. This line seems even stronger than the white line.

Look at another zoom-in daily chart below.

In my opinion, the intersection area between the white line and the brown line will be a good buying area IF gold ever drop that far.

My conclusion, gold is going to have a strong support. Let's see if it can hold or it will also be broken.

Trade well.

GG - 2012.12.20

Interesting Link

Instead of making a forecast or review, I would like to specially put this link in this post:

http://nicoomer.blog.kontan.co.id/2012/12/13/apalagi-yang-anda-tunggu-bagian-2/?utm_source=Jumat%2C+14+Desember+2012&utm_campaign=Kontan+Newsletter&utm_medium=email

This is a very interesting reading with supportive logical and strong arguments.
Since this is the link to the second part of the original author's post, please look for the first part by your self and read that (I recommend to do it).

Good luck.

GG - 2012.12.18

Forecast - 2012.12.18

Gold had dropped down on Dec 13th significantly. I didn't know what the reasons were because USD did not go up. Other pairs also didn't drop like XAU.

It seems that the purple support is more confirmed as the new main trend support because it seems that market respects that purple line and gold bounced back exactly at that line.
After forming a hammer in H4 Chart, gold continue to strengthen until this moment.
If gold can break up the purple resistance and continue to play in the upper side of the purple line, I think there will be a bigger chance for gold to be bullish for closing its price this year.
But if gold goes back downside and enter the previous path (between the purple lines) than there more likely gold will be closed under 1700 for this year.

Trade well

GG - 2012.12.18

Forecast - 2012.12.13

It is now about 45 minutes after FOMC statement.
(Note: the number 3:44:24 is the time left for that 4 hour candle to finish. Means the red candle just run 15 minutes and 36 seconds)
Just exactly as the news predicted, The Fed is extending Operation Twist program which spend $45B a month. It means we don't have any change as current situation. The Fed is spend a total $85B/month for its program.
I guess gold will strengthen but not too much. We have so many resistance above 1730. So, I will not expect too much now for an uptrend.

Seeing at the H4 Chart, 45 minutes after FOMC, it's clearly seen that gold has strengthen to 1723.25  but then has correction in the next candle. From those 2 last candles, which represents 45 minutes after announcement, I think it  gives us a clear view that FOMC announcement doesn't have much effect on gold price.

 Also note the volume when FOMC announcement. There was not big, just as ordinary as other moments. That gives me a picture that market consider the FOMC as an ordinary event, nothing special about it.
 I guess gold will play between my white line and the yellow line (about 1709-1726) for today with a slight upside tendency.

Trade well....

GG - 2012.12.13

Forecast - 2012.12.12

Gold still move around the white line, mostly above the white line. It tried to go lower but failed, indicated that the bear didn't have enough power to push gold lower.
In the other hand, the bull seems also don't have power to push gold higher yet.
I think the market is still waiting for FOMC announcement later tonight (my time) and I'm sure that the price will move significantly at that moment.
If we put the news into account, I believe gold probably will go higher at FOMC announcement because there is a big probability that the fed will announce additional easing to extend the operation twist that will be expired this month. If the fed do that, I believe gold will go higher, and more likely will break my yellow resistance. My expectation area for this scenario is 1730-1750 area.
But if there is no operation twist extension, I think gold will break low, and if it can break both my support, I think it can go to 1675 area. But I doubt gold can go lower than that.
In my opinion, gold will move to both sides (up and down) in a big volatility first before going to the certain direction. So, don't put your SL too close.

Trade well

GG - 2012.12.12

Forecast - 2012.12.11

As predicted in the last posting, the bearish seemed already diminished, at least temporarily.
The very good NFP last Friday might only showed a "fake" truth about US economic conditions, that what I guess what the market considered about that NFP data.
This is may be one of the explanation of why gold couldn't go lower: http://business.time.com/2012/12/07/the-bad-news-behind-the-good-jobs-numbers/

As seen in my H4 Chart above, gold had broken my purple resistance (1) and the white resistance (2) very "easily" in one pass only, but has a correction at the moment. I noted that the move upside happened even after the "good" NFP data. That was unusual at "green" US data and that meant something for me, especially in a strong downtrend path.

I think gold will still stay above the white line for the moment, but I'm also not sure it will go higher in the short term. At most, I think it will be restrained below the yellow line (my resistance from daily chart) because I don't see any strong reason for gold to go higher today.

On the other side, I think gold will not go lower than 1698 for this short term, at least until FOMC.
Most likely it will stay above the purple line (around 1702-1703).

A note about FOMC: I get a feeling FOMC will make gold move to the upperside IF the issue about new bond buying program is announced for January 2013. Let's wait and see...

Trade well

GG - 2012.12.11

Forecast - 2012.12.07

Just as expected, NFP gave a high volatility today.
Gold still moved in the green path before NFP and then broke up right after NFP.
It was really unexpected move since the NFP data was very good for USD (really green, see attached picture above).
Maybe it's too early to say, but that move gave me an impression that bearish mode is almost over.
With very good NFP (64% more than predicted), gold should drop much lower than that. At least, it shouldn't go upside that quick.
I don't know what is the reason, but this is an abnormal reaction of the market. Anyone must trade with cautions. Even more we are facing the end of the year when many traders will be off from the market and the volume will decrease significantly. In that kind of situation, usually little volume can make high volatility. Better be more cautious.

My personal opinion is still bullish for 2013. The last data that I wanna wait and see is the FOMC meeting next week. It may give a significant direction since this is the last FOMC meeting before 2013, when the fiscal cliff will go or not go.


For the short term:
Looking at the 4H chart above, I guess gold will begin sideways between the purple lines.
Gold needs to break the white line to be considered as bullish mode.
In other scenario, gold must break the purple support at the bottom to be considered as bearish mode.
The move between the purple lines will be considered as sideways, as the most likely scenario for me at this moment.

One more additional note from me:
I read comments from many traders in FF site. I think it is not logical to say that QE will be stopped in this short time. Why? It's very clear that the economy crisis is far from over yet and stopping the QE at this time will make a worse condition in a sudden and damage the recovery that begin (?) to develop now. We are still in an uncertainty at this moment and printing more money seems to be the only solution for many countries. So as long as the governments of those countries can't find another solution for the crisis, QE will not stop earlier than those other countries's money printing.

I still believe that QE will run at least until the second half of 2013 and won't be stopped just because one or two months good data. Only time can tell....

Trade well....

GG - 2012.12.07

Update - 2012-12-06

Usually I never post an update only few minutes than my forecast. And the most unusual for me is I never post other chart but gold.
But especially for this update, I make an exception. I can't help not to include comment this E/U chart.
It almost pretty clear that I can see a Cup and Handle pattern in this H4 E/U chart. I think most likely we will have a correction for E/U to its 38.2% fibo.

But this is not the only reason I want to comment about E/U chart.
Usually, E/U and gold have a positive correlation, which means, if E/U up then gold will also up and vice versa. But if you really notice, since Nov 26 (almost 2 weeks) we have seen that E/U and gold have a negative correlation. We can see that when E/U continue to go up from Nov 26, but gold went all the way down. I don't know what is the reason and until when it will be like that, but I think this won't be long since both has USD as their pairs.

As we have seen that Dollar Index is going down, then we can assume that the abnormal move is from the gold side. Eur reacts normally. If USD go down Eur should go up. And that's what gold should be normally, but it didn't. USD weaken and gold also weaken. This won't be forever. I guess gold should react normally soon.

One more interesting from H4 gold chart above is, it still respects the green path.
Look at the last candle. Gold move up so strong but stop exactly at my green path resistance and go back down to the yellow line.
I still stand by my opinion, that if gold can hold its position not lower than the purple line until the closing market this week, more likely we will have a sideways with slightly upside tendency as my last post.
But if gold can break the purple line, we may have a bearish up to 1665-1675 area.

Good luck.

GG - 2012.12.06

Forecast - 2012.12.06

Until tonight (my time) when I make this posting, gold is still playing between my green path.
It seems that gold can't go lower this whole day and beginning to strengthen a bit.
Although yesterday it tried to break the green path support, but it went back in the same 4 hours candle and make a higher low in the following candles. I think gold is making a new support line (the purple line).
If gold can stay above the purple line until this week closing market, I think this is the lowest area gold can go down.
Actually I'm thinking that it is making a new sideways at this moment between my purple support and my lower yellow line (faded arrow). The most is the sideways between the purple and the white line. At least until NFP tomorrow.
Yes, there's a big chance of high volatility when NFP announced on Friday.
So, strict to the MM and trade well....

GG - 2012.12.06

Forecast - 2012.12.05

Gold continue to slide down and seems to follow my green path. It already breaks the white support of its last main uptrend and also breaks its yellow support.
Looking the fact that even the bad US data could not push the gold up, I guess gold will try to break down the green support. If it succeed than it is big possibility that it will go to 1670-1675 area.
But always be careful. Although it seems that the bear is so powerful at the moment, a significant surprise may boost the gold upside suddenly just as last upside move when Obama won the election.
Until this moment, I still see gold will not move lower than 1670-1675 area.
Upside scenario: As long as gold can't break the white line, I can't consider we have uptrend yet.

Good luck...

GG - 2012.12.05

Forecast - 2012.12.04

Gold has broken its Main Trend support (white line) today but was able to bounce up at its last support (yellow line) at 1698.
Looking at its move this two last days, it seems that gold is making a sideways with tendency slightly downside.
I guess gold will move in a really narrow downside path (green path) and should break either downside or upside tonight (my time).
Gold must break yellow support (1698) and green line support to confirm its downtrend. If that happens, there's a big possibility we will have 1674-1698 area for the following days.
For the upside scenario, gold must go to the upper side of the White line first. If that happens, I think gold will play between the white support and yellow resistance only and making another sideways.
The most likely in my opinion, gold still moves between the yellow R/S.

Trade well....

GG - 2012.12.04

Forecast - 2012.12.03

Gold market seems to have many surprises in the last week.
When it seemed to be a confirmed uptrend, it suddenly dropped back to the south and now gold is testing its Main Uptrend Support.

From the H4 chart above, we can see that gold had a significant drop last Friday, but was able to make a pull back a little bit to the north at closing time.
This is a very interesting condition since we can see that gold has a significant bear power that push to the support area, but in the other hand, we also have a perfect doji in our 4H chart from the last week closing. More likely it will form a morning star.
If we have a confirmation of morning star from the first H4 chart candle in the opening market in Monday (just few hours from now), technically gold should go north.
Personally, I expect gold will go north on Monday although I can't say to what level yet. This is because I see gold still respects its support area and always make a rebound when touching that white support line (see the chart).

If we look to fibo line, we can see that we also have the 61.8% around the white support area.
It makes the1704-1707 area become a stronger support.
And with the possibility of the morning star (doji) from the last 4H candle, I believe it is reasonable to predict that we will have an upside move, at least for the opening market. If that happen, I expect gold only can go at most to 1730 area, not higher.

For the downside scenario:
If the bears can break 1703, there's big possibility we will have 16xx. But I believe it will not lower than 1672.

Since in the week ahead we are going to have many big impact news, just keep your MM tight.
Remember, we have seen many surprises in the last week. And believe me, those would not be the last ones.

GG - 2012.12.03