ICmarkets

Our take on the yellow metal...

FX:XAUUSD   Gold / U.S. Dollar
177 1 6
During the course of yesterday’s sessions, price tagged offers around the daily resistance level given at 1354.6, which, as you can see, managed to rotate the yellow metal to the downside. At the time of writing, the buyers and sellers are seen battling for position within a H4 support area at 1347.0-1342.4. However, in view of the rebound seen from the current daily resistance barrier, alongside room being seen for this market to move lower on the weekly chart, we feel this H4 zone is likely on the verge of giving way.

With the above points in mind, the next downside target to have your eyeball on is the H4 mid-range Quasimodo line at 1332             .3. Nevertheless, a buy from here is not really something that interests us. What we are fond of right now is the H4 demand seen below it at 1315.6-1319.6 (positioned within the daily demand area at 1305             .3-1322.8 – the next downside target on the daily timeframe ), since it merges almost perfectly with a H4 harmonic Gartley reversal zone!

Our suggestions: Since the more likely direction is south today, we’re going to be watching for the following:

• A break below and retest of the current H4 support area . Should this come into light, we’ll look to enter short following a lower timeframe sell signal, targeting the 1332             .3 mark and then the H4 demand area mentioned above at 1305             .3-1322.8.

• Also, as we mentioned above, a buy from the H4 mid-range Quasimodo line at 1332             .3 is not somewhere our team would consider a high-probability level for a reversal. As such, we’ll be looking for price to break below this line followed by a retest and a lower timeframe sell signal, targeting the above said H4 demand.

Should price reach this H4 demand base, all short positions are to be liquidated and traders are recommended to begin hunting for long positions from the lower timeframes. In regard to lower timeframe entries, we usually look for the following: an engulf of a supply or demand followed by a retest, a trendline/break retest or simply a collection of well-defined selling wicks/buying tails seen around the higher-timeframe area of interest.
it seems that the bull energy from Brexit is fading away...
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