Yesterday we highlighted the H4 demand zone at 1315.6-1319.6 as being a considerable area to keep an eyeball on. So much so, our team set a pending buy order at 1319.8. As should be evident from the H4 chart, the order was filled mid-way through yesterday’s London trading and has since rallied to highs of 1324.0 at the time of writing. For those who missed our previous reports, we built a case for entry using the following criteria:
• A merging H4 harmonic Gartley reversal zone seen between the H4 78.6% Fib support at 1322.8 and the X point of the H4 harmonic pattern at 1310.7.
• A supporting daily demand base at 1305.3-1322.8, which sits on top of a weekly support area at 1307.4-1280.0.
With the US dollar index also recently reacting to a H4 supply seen at 94.96-94.84, this could push the dollar lower today, and by extension, the gold market higher. Ultimately, we’re now looking for price to tag the minor H4 supply area seen marked with a black arrow at 1326.9-1324.9 to take profits and reduce the stop to breakeven. However, with traders likely taking on a cautious stance ahead of Yellen’s speech today, we are going to be watching our position carefully! Should price show signs of topping out before our take-profit area, we will likely move our stop to breakeven and let the market do its thing from the safety net of a breakeven stop. Well done to any of our readers who bought this unit alongside us!
Levels to watch/live orders:
• Buys: 1319.8 LIVE (Stop loss: below the X point of the H4 harmonic formation: 1309.1, which is, as you can see, set just beyond the H4 support at 1310.3).
• Sells: Flat (Stop loss: N/A).