Our old friend Gold is at an important level and the direction we see in the next few sessions will give us an indication of the near and medium term direction. Late yesterday i drew attention to the fork (P0 19th March 1669.70, P1 1696.85 on 27 Mch & P2 1627.95 on 22 March) and seen drawn in blue in last nights post. Overnight and today we have seen a first and second attempt to break up through this line. Recent price action is bullish with a near 40$ rally from the low 1650's upto the recent high around 1680 and just piercing the UMLP line. Today we have made a second LH at 1677.85 and are currently 1671 with a London session low of 1669.55...this is a LL. There is no trade yet but a break of this line would strengthen my view that we are set to make a higher pivot on the daily chart and take out 1696 and thus a retest of 1700. However today we may see price come back to the low 1660's. In my view this market is set to go higher and touch the yellow CL at 1692-1696 area. This does not affect my long term bearish view however.
JUNE S&P is heading to its CL destination of 1395 off the fork (P0 23 mch 1380.50, P1 1419.50 on 27th Mch and P2 1352.50 on 10 April). This is the dominant fork in all time frames and as such is an ideal yardstick to guage price direction and strength. This fork can be seen in the simplified chart below.
Below there can be clearly be seen structure at 1385 plus the down sloping RL's at 1382-1383 and these are the levels I will watch this afternoon when the US opens.
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