Daily Timeframe: The shows that selling was indeed seen yesterday from just below a daily supply area coming in at 1235.51-1222.37. In our humble opinion, we see very little support that could stop further selling being seen down towards at least 1182.01, a major daily swap level.
4hr Timeframe: It was reported yesterday that Gold needed to make a decision, as the market was trading in ‘multi-timeframe’ supply (weekly, daily and 4hr supply at 1226.52-1220.97).
That decision may have already been made for the simple reason that price aggressively closed below a 4hr resistance swap level seen at 1202.83, which informed us that selling strength has potentially entered the market.
For anyone who read our previous report on gold , you may recall us mentioning that if a close lower was seen, then that would be our cue to look for selling opportunities on the retest of 1202.83 around the 1201.84 mark. We took a short position yesterday at 1197.83 around 4pm GMT on the 15 minute-timeframe. The reasoning behind our trade is simply because once price hit 1202.83 at around 13.30pm GMT , the market then proceeded to drop and likely consume some of the buying opposition around 1195.02. Following this, price then took around an hour to rally back up to 1202.83, and faked above the high seen to the left at 1203.03, this was our entry signal to short with confirmation.
First take-profit target for the trade are 1182.01.
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: 1197.83 (Predicative stop-loss orders seen at: 1204.90).