ICmarkets
Short

What we're looking at on Gold right now....

FX:XAUUSD   Gold / U.S. Dollar
381 0 2
The yellow metal steam rolled itself north last week printing its third consecutive weekly candle and gaining over $55 in value at the close 1173.0. Consequent to this, weekly resistance (now acting support) at 1157.4 was taken out and price is now trading within shouting distance of a weekly supply at 1205.6-1181.2, that fuses together beautifully with the upper limit of a weekly wedge taken from the high 1488.00.

Shifting a gear lower, the daily picture shows that last week’s bullish assault ended with price taking out two Quasimodo resistances at 1156.6/1169.8. Now, from this angle at least, the next upside objective for price to reach is seen at 1179.2 – a resistance. This level has performed well in the past and considering that it lurks just below weekly supply (see above), this is certainly a hurdle worth having on your watch lists this week guys.

And finally, a quick look at Friday’s H4 reaction to the mighty NFP release shows that price respected support at 1147.8 nearly to-the-pip. If you check out the M30 timeframe you’ll see there was a beautiful array of buying tails printed here – a perfect signal to get long – shame this was around news time though! From this number, price blasted north reaching highs of 1174.4 by the day’s end.

In light of both the weekly and daily timeframes closing relatively near to strong-looking resistance structures (see above), our eye is automatically drawn to the H4 Quasimodo resistance level sitting just above current prices at 1179.3. This will be our first port of call this week for shorts. Be that as it may, shorting here without confirmation from the lower timeframes is not something we’d be comfortable taking part in. The reason for why is simply because price can just as easily continue driving north into the weekly supply area before any worthwhile selling is seen. That being the case, in the event that our H4 Quasimodo line is taken out we’ll then reassess where the next logical H4 resistance will likely come into play.

Levels to watch/live orders:

• Buys: Flat (Stop loss: N/A).
• Sells: 1179.3 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).
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