Gold – Descending trend line breached, but…

Daily chart

• Two consecutive daily close above the descending trend line indicates the bulls remain in control and prices could extend the rally to $1250 levels.
• However, caution is advised as the RSI is almost overbought.
• Furthermore, prices are yet to take out the immediate resistance of $1241.50 (Oct 7 low).
• Bearish scenario – Failure at $1241.50 followed by a daily close back below the trend line would signal a short-term top is in place. Prices then could revisit $1200 levels.  
• Bullish scenario – Sideways action in the range of $1235-1250 would open doors for a more sustained rally towards $1263-1270 levels.

FTSE 100 – Bears reinforced

Daily chart

• Failure at 7227.2 (previous day’s high) followed by a drop to 7160 today suggests the corrective move from the last week’s low around 7100 levels has topped out.
• The daily chart now shows a falling tops formation. The daily RSI looks set to breach 50.00 levels as well.
• Thus, the index looks set to test the support at 7130 (Oct 11 high) and 7100 levels.
• On the higher side, only a daily close above the descending trend line would open doors for a revisit to record highs around 7350.