THE COMMODITIES CORNER: XAU/EUR broke above bull flag resistance

http://www.forex.com/uk/post?SDN=0f9aa4b8-e502-489a-926c-810f89afd0a1&Pa=20db1fa6-e674-420c-9a87-2ee29261d638

Within hours of Monday’s Commodities Corner update, the gold-cross tested the key €1046-49 level highlighted and bounced significantly. During its rapid ascent, it took out bull flag resistance around €1054, propelled above the prior high near €1062 and even gave the €1070-72 resistance zone a run for its money before finally backing off. The move happened exactly like we anticipated, “Thin liquidity also suggests very narrow ranges, which are likely to be followed by sharp moves higher or lower and then another period of consolidation”, this enabled the pair to reach our initial profit target of €1070-72. 
While our longer-term bias for XAU/EUR remains bullish, we believe with the New Year approaching it is foolish to remain in our long position as the risk due to the lack of liquidity outweighs the potential reward of profits.
We’ll be back in 2011 for our next Commodities Corner update!

Chart Source: Forex Charts by eSignal
Chris Tevere, CMT
Senior Technical Strategist
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