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Gold Approaching Significant Resistance Level

Published 28/03/2017, 11:19 am
XAU/USD
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Originally published by AxiTrader

COCOA has been consolidating near a key resistance level in the past few trading days. $2190 and the 100 DMA have capped the topside for now. Overall, Cocoa remains in a strong downtrend and selling rallies the preferred strategy. Strong resistance can be expected at $2290. It would take a clear break above $2500 to signal a real short squeeze, but that seems unlikely at the moment.

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COFFEE remains in a short-term downtrend. Support ahead of $135 has held so far, but it continues to trade within a descending channel. A test of $132.80 seems likely in the near-term. That level is key, and a break below would suggest that the downtrend could extend to at least $120.50 (May 2016 low). To the topside, keep an eye on the upper line of the channel, as well as the 21 DMA (currently around $141.60).

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COPPER had a solid bounce of $2.55 support today, and the uptrend remains intact. It faces resistance in form of the falling trendline from the February high, as well as the 21 and 55 DMA, which are close to current levels. Should Copper take out the resistance area between $2.65 and $2.67, a retest of $2.82 seems likely in the near-term.

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GOLD failed to clear the resistance level at $1261, which is also very close to the 200 DMA. Nevertheless, momentum remains strong and further gains seem likely. A daily close above $1261 resistance would then signal an extension of the rally to at least $1292, if not $1337 (Nov 2016 high).

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NATURAL GAS is sending some mixed signals. Overall, the uptrend is intact and the strong bounce off $2.50 has confirmed that bulls remain in control. Nevertheless, Nat Gas has been struggling with resistance at $3.10 for a while. Should we not see a clear break above that level soon, Nat Gas is likely to retest support at $2.90. Larger dips should still be used as buying opportunities. The outlook for Nat Gas remains mildly bullish as long as support at $2.50 is intact.

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SOYBEAN is looking increasingly bearish. It broke below key support at $992 last week and it seems likely we'll see a retest of $930-935 support soon. Traders could keep an eye on the area around $990 for possible sell opportunities.

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WTI bounced off $47 once again. However, it would need a clear break above $49.70 for the triple bottom to be confirmed. Immediate resistance is noted at the 200 DMA around $48.70 as well. Selling rallies is still the preferred strategy here.

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