FxWirePro: Gold forms hammer in daily chart, good jump till $1300 likely

Candle stick pattern formed- Hammer

Trend line breakout at $1280.

• Gold has rallied sharply yesterday and hits 1- week high on weak U.S dollar and geo political tensions. The yellow metal jumped almost $28 from the low of $1260 made on Friday after release of US Nonfarm payroll.
   
• North Korea is widely expected to test missile today as nation celebrates a public holiday. Oct 10 in North Korea is celebrated as Party Foundation day.
   
• US Dollar index has shown a minor weakness after hitting a high of 94.27 on Friday. It is currently trading around 93.51. The pair is facing major support near 93.40 (55- day EMA) and any break below confirms minor weakness. The near term resistance is at 94.45 (50% fibo) and any break above will take the index to next level till 95.
   
• U.S 10 year yield is trading stable at 2.36% on increasing expectations of Fed rate hike.
   
• Technically gold is facing major resistance around $1290 (34- day EMA) and any break above will take the yellow metal till $1298 (50- day MA)/$1302/$1309 (daily Kijun-Sen)
   
• Gold’s near term support is around $1262 (61.8% retracement of $1204 and $1357.90) and break below will drag the commodity down till $1250 (200- day MA).The yellow metal should close below $1250 for major trend reversal. The near term support is around $1276 (10- day MA).

It is good to buy on dips around $1282-$1284 with SL around $1275 for the TP of $1287/$1295.