Gold: Gold gave sharp sell off after crossing the support level of 1770$ and after the crossover in just three trading session it tested the level of 1530$ just near the level of 1500$ support. After testing the level of 1530 bargain hunting was seen at level below 1550 and closing was seen near 1621$. Shot bounce was seen as short covering from the lower level and tested the level of 1677$ which was 38.2% retracement of the fall from the higher level of 1920$ to the lower support level of 1533$. We continue to maintain the negative view on gold till the time resistance is holding at 1677$ and falling below 1620$ will try to change the near term low of 1530 and may test 1440$ and 1400$ on lower side. Some range bounce move is expected in the range of 1680 and 1620 level and once the support is broken will continue the down trend. If sustain trading below 1600 will further bring to lower level of 1400$ in near term. Further if sustain trading above 1680 on closing basis will hamper the bearish outlook and will bring to 1750$ to 1770$ on higher side. Stochastic which has reverted from the oversold zone has moved flat and this rise is just looking like its taking a breath before the next down side move and with the price movement below the support level will reenter in oversold zone where some good down fall in price and be expected.

EURUSD: Looking at the chart EURO has tested 100% extension at 1.3430 which is the fall from point A of 1.4937 to point B at 1.3837 taking from point C at 1.4548 level. It is also trading in the falling channel where it has tested the lower trend line which is coming at same level of 1.3400 level. On other side it’s just trading below 500 DMA which is coming at 1.3575 near to the resistance level of 1.3600. Euro is expected to trade in the range, where on higher side resistance is seen at 1.3600 and lower side support is at 1.3350 level. Either side crossover will further confirm the trend, where if the support of 1.3350 holds on closing basis and crossover above 1.3600 will bring short pull back to 1.3900 and 1.4100 on higher side. Sustain trading below 1.3350 will continue the down trend and expected target will be 1.3100 and further if trading is seen below 1.3000 will bring to 161.8% extension of a-b from point c which comes to 1.2800 level. Currently it’s trading in the mid range of 1.3500 and we wait for breakout on either side where short term direction will be confirmed. On the fundamental side European officials are considering setting up a special purpose vehicle to buy bonds issued by distressed European states (sources) and this will give some boost to the currency. If we look at 26^th Sep 11 Candle it is showing Morning Star formation appear at the end of a substantial downtrend, and are most reliable when price reaches a critical area of support, such as a trend line, or Fibonacci retracement level which indicates reversal in price can be expected if the previous days low of 1.3360 holds. Stochastic which were trading in oversold zone have just popped out with positive intersection showing side way move just above 20% zone indicating either side trading beyond the said range will move the same where sustain trading above 1.3600 will bring the same towards the overbought zone.