Daily view: From the daily scale, however, we witnessed price take out demand at 1109.4-1122.7 on Wednesday, and slam dunk itself into a pile of freshly baked bids around 1101.9 – a minor swap support barrier. Thereafter we saw traders respond well to this level forming a relatively stable pin candle into the weekly close. Upside targets to keep an eye on this week come in around supply at 1126.7-1118.9, followed closely by another supply just above at 1147.8-1134.2. A breakdown through 1101.9, however, would likely place 10185.1 back in the limelight – a long-term swap .
4hr view: For those who read Friday’s report http://blog.icmarkets.com/friday-11th-september-daily-technical-outlook-and-review/ you may recall us suggesting to keep an eye on the ignored Quasimodo level at 1111.6 for potential shorts into this market. As you can see, price responded beautifully to this barrier, pushing Gold back down to swap support at 1102.4, which, as you can see, was aggressively defended around the close.
With all of the above taken into consideration, the overall structure of this market can be boiled down to the following points (levels above):
• Weekly trade shows little in the way of support to stop Gold from continuing lower this week.
• Daily action, on the other hand, reveals that supportive bids are being seen around a swap (support) level.
• On the 4hr timeframe, price is now effectively capped between the ignored Quasimodo level and a swap support barrier.
Therefore, looking to the week ahead, we are going to be closely watching both 1111.6 and 1102.4 on the 4hr timeframe for potential confirmed trades this week.
A cut through 1111.6, nonetheless would likely offer two things. Firstly, we believe it would set the stage for a continuation move north up to a swap at 1118.1 (located close to daily supply mentioned above at 1126.7-1118.9). Secondly, it may provide an opportunity to trade long should price retest 1111.6 as support (waiting for confirmation here is highly recommended). On the flip side, in case 1102.4 is engulfed, the river south should be ‘ripple free’ down to at least the 4hr swap support at 1091.5. For us to be given the green light to short following a close lower, we’d need to see price retest this area as supply together with lower timeframe selling confirmation.
Levels to watch/ live orders:
• Buys: 1102.4 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) Watch for offers at 1111.6 to be consumed and then look to enter on any retest seen at this number (confirmation required).
• Sells: 1111.6 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) Watch for bids at 1102.4 to be consumed and then look to enter on any retest seen at this number (confirmation required).