Friday’s action on the H4, however, was relatively painful for us. For those who read Friday’s report (http://blog.icmarkets.com/friday-11th-december-daily-technical-outlook-and-review/), you may recall us mentioning to watch for confirmed longs from both support at 1068.3 (no longer on the chart) and demand at 1058.0-1062.4 (boasts 61.8% Fibonacci support at 1062.0). Unfortunately, we were unable to pin-point a lower timeframe buy entry at the respected demand due to price rebounding so fast from the top-side of this area, which is a crying shame since it rallied beautifully up to Quasimodo resistance taken from 1078.9.
With what we’ve noted on the higher timeframe structures (see above), the two H4 rejection wicks seen at this Quasimodo level before the close will not likely see follow-through selling today in our opinion. In fact, we’re actually looking for price to break above this barrier and touch gloves with resistance taken from the high 1098.0, followed closely by swap resistance just above at 1087.1.
One could look for intraday (confirmed) bounces from these barriers, but be aware that the more attractive zone for shorts sits above at 1095.7 – another Quasimodo (corresponds nicely with the underside of both the weekly and daily swap supplies ).
In the event that our analysis is correct, and Gold does indeed rally this week, we will also be looking to take advantage of any buy opportunities on the break above and retest of 1087.1, targeting 1095.7. We would advise trading this move only with the backing of supporting lower timeframe confirmation since one can never be sure if price will fakeout.
Levels to watch/ live orders:
• Buys: Watch for offers to be consumed around 1087.1 and then look to trade any retest seen at this level (confirmation required).
• Sells: H4 resistance Tentative – confirmation required (Stop loss: dependent on where one confirms this line). 1087.1 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).