ICmarkets

Our thoughts on the yellow metal...

FX:XAUUSD   Gold/U.S. Dollar
221 0 5
Despite Gold             closing only a mere $5 higher last week, price ranged a whopping $45 consequently causing this market to print a weekly indecision candle with a slight edge being seen to the upside. In addition to this, we see the weekly chart offering little direction at the moment due to price now loitering mid-range between supply at 1307.4-1280.0 and support drawn from 1224.1.

Looking down to the daily chart shows us that support at 1246.4 was retested on Friday, which also printed an indecision candle, but this time with a slight edge going to the bears. On the assumption that the bulls defend this level this week, the next hurdle in the firing range will likely be resistance penciled in at 1283.4 which is housed within weekly supply mentioned above at 1307.4-1280.0.

Moving down into the pits of the H4 chart, the yellow metal ended the week closing below and retesting the underside of support at 1256.2. To a lot of traders, this will be a level to short from! But because we know that daily support at 1246.4 is now in play, shorting into this flow might not be the best path to take! Therefore, our plan of attack today and possibly into the week will be as follows:

• Watch for the market to close above the current H4 resistance at 1256.2 and look to take advantage of any retest seen (preferably with confirmation from the lower timeframes). Assuming this comes to fruition; targets for longs are Thursday’s high 1270.8, followed closely by the H4 Quasimodo resistance line at 1279.6.

• We still also have our eyes on shorting from the H4 supply area at 1285.5-1278.5, more specifically, the H4 Quasimodo resistance level we just discussed above. Not only does this barrier and its surrounding H4 supply converge with the current weekly supply, but it also encapsulates the current daily resistance hurdle as well. As a result, a market entry at 1279.6 with a stop above the H4 supply at 1286.8 could, depending on the time of day, be something to consider here.

Levels to watch/live orders:

• Buys: Watch for price to consume the 1256.2 level and look to trade any retest seen thereafter (Lower timeframe confirmation required).
• Sells: 1279.6 (Stop loss: 1286.8).
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