By FXEmpire.com
The gold markets rallied ever so slightly during the session on Friday in reaction to possible central bank liquidity measures in reaction to some kind of nasty surprise after the Greek elections. The resulting candle for the session formed a shooting star though, and it has to be said that the $1,640 level just above has been massive resistance lately. In fact, this almost looks like a selling opportunity at the moment.
The market will of course be heavily influenced by central bank measures and reactions to the Greek elections. At this point in time, the elections are running neck and neck, and it is almost impossible to differentiate the two as far as the polls go. The market certainly will have some kind of reaction as to whether the socialists or capitalists come into power. The real question is going to be how people perceive it, and as a result this is going to be a very volatile market over the next trading session we believe. In fact, it is probably one that you will be wise to avoid. The market continues to be choppy and we think this is going to continue.
However, over the longer term, we are bullish of gold as a general rule, and like buying. We would however, wait until we can get it at a lower price as a pullback looks very likely at this point. The daily chart should offer us supportive candle the closer we get to the $1,560 level, and we are willing to buy any that appear at this point. The breaking above the $1,650 level would be a massively bullish signal that has us long of this market for a move of at least $40. The upside should see as much as a run to the $1,800 level over time, but there will certainly be a lot of choppiness to go along with that ride. The bullish case is the easiest one for us to make, and we will not sell as a result. In fact, we can’t sell until we get a daily close sub-$1,500.
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Originally posted here
