Looking down to the , nevertheless, the yellow metal has found active bids around daily demand carved from 1270.8-1257.5. In view of yesterday’s response from the top-side of this demand, and the prior day’s candle wick seen marked with a green arrow at 1288.5 likely clearing overhead supply, this market could potentially rally higher today.
Stepping across to the H4 chart, thanks to yesterday’s bounce from H4 support at 1269.6 we may have a nice-looking advancing pattern to play with. In addition to this, notice that this pattern also completes beautifully around H4 supply at 1295.4-1291.9, which is bolstered by H4 resistance at 1296.3 and lodged within the above said weekly supply.
Our suggestions: With the looking like it wants to advance, the H4 pattern may very well complete today. And, since we know that price is currently trading from weekly supply, a short from the H4 is something we’re very interested in. However, we are not willing to place a pending order at this zone as there’s a strong possibility of a fakeout taking place before sellers step in. Waiting for lower timeframe selling confirmation is, at least in our opinion, the safer path to take. For those who have no confirmation methods, you may want to consider the following:
• A break/retest of demand.
• A break/retest.
• Selling wicks – essentially we look for a cluster of very obvious spikes off of lower-timeframe resistance levels within the higher-timeframe zone.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1295.4-1291.9 Tentative – confirmation required (Stop loss: dependent on where one confirms this area – usually stops are placed 5-10 pips beyond confirming structures).