Gold: Technical outlook and review.

FX:XAUUSD   Gold Spot / U.S. Dollar
Weekly Timeframe: The rebound from the weekly decision-point demand level seen at 1136.30 extended higher recently, forcing Gold to close (1222.20) a few pips below a weekly supply area coming in at 1255.20-1226.18. It will be interesting to see what the lower timeframes show.

Daily Timeframe: The daily timeframe shows that apart from Monday and Tuesday, the Gold market was relatively quiet. Tuesday saw price push above a daily decision-point supply area at 1235.51-1222.37, which in our view signaled Gold wants to trade higher into the aforementioned weekly supply area. With this in mind, we feel that the path north is relatively clear up towards a daily Quasimodo resistance level coming in at 1249.45, seen very deep within the aforementioned weekly supply area. Could we see a decline in value down towards a daily decision-point demand area at 1185.97-1203.20 before the market attempts to trade to 1249.45? Let’s see what the 4hr timeframe can offer us.

4hr Timeframe: The 4hr timeframe shows that from Wednesday through to Friday, the market was seen grinding (pink trendline) south after consuming sellers around a minor 4hr swap level at 1235. 40 . This consequently saw Gold push below a 4hr swap area seen at 1221.13-1215.21 marked with a blue arrow. And as a consequence, stops were likely triggered from traders attempting to fade this area, which at the same time potentially cleared the path south down towards a 4hr decision-point demand area coming in at 1199.48-1205.02 (located just within the aforementioned daily decision-point demand area).

In our opinion, the most likely scenario for this week is that prices will likely continue to decline down towards the 4hr decision-point demand area mentioned above, and from there we anticipate a rally higher towards a 4hr supply area seen at 1244.52-1240.15. A small reaction is expected here, but overall we see prices breaking above here into the aforementioned daily Quasimodo resistance level (see red arrows), which if you remember is seen deep within weekly supply at 1255.20-1226.18 – a perfect area to look for shorts!

We have placed a pending buy order at 1205.88, with our stop set below at 1198.73, in an attempt to take advantage of the potential move north.

Current buy/sell levels:

• Buy orders: 1205.88 (Predicative stop-loss orders seen at: 1198.73).

• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

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