GOLD: End Of Week Technicals - possible bullish breakout

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Press review

Sergey Golubev, 2015.09.28 17:37

Bullish intra-day reversal based on negative data for Pending Home Sales news event (adapted from realtor.org article)

The price for EUR/USD M5 timeframe broke 100-SMA and 200-SMA from below to above together with symmetric triangle pattern and stopped below 1.1234 resistance level. The price was reversed from the bearish to the bullish market condition because of negative data for Pending Home Sales news event. If this level is broken so the bullish trend will be continuing on this timeframe.

"Pending home sales retreated in August but remained at a healthy level of activity and have now risen year–over–year for 12 consecutive months, according to the National Association of Realtors®. A modest increase in the West was offset by declines in all other regions."

"The Pending Home Sales Index, a forward–looking indicator based on contract signings, decreased 1.4 percent to 109.4 in August from 110.9 in July but is still 6.1 percent above August 2014 (103.1)."

"Lawrence Yun, NAR chief economist, says even with the modest decline in contract signings, demand continues to outpace housing supply and elevate price growth in numerous markets. "Pending sales have leveled off since mid–summer, with buyers being bounded by rising prices and few available and affordable properties within their budget," he said. "Even with existing–housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago."

As to the GOLD (XAU/USD) so M5 price was on bear market rally within the primary bearish market condition for trying to break 100-SMA to come to the ranging area of the chart. The key 'reversal' resistance for this timeframe is 1135.28, and if the price breaks this level so we may see the ranging condition with the good possibility to the bullish reversal in the near future.