Turning our attention to the daily timeframe, the action here is now fixed between supply coming in at 1187.6-1179.6, and a swap demand area seen at 1169.8-1154.7.
Winding down to the 4hr timeframe, however, we can see that during the course of yesterday’s sessions, Gold rallied from the swap demand area at 1169.8-1162.5, reaching highs of 1180.6 on the day. Assuming that Gold continues to rally, surpassing the swap at 1187.5 and up to supply at 1205.6-1200.4, we’d have no hesitation in shorting at market from this zone. Here’s why:
1. Located deep within both weekly and daily supply (see above).
2. Also converges nicely with the aforementioned weekly (see above).
3. In addition to point two, there is a potential 4hr forming with a completion zone seen in green at 1202.3/1207.1.
Of course, the above said 4hr is a little way off for now, but is certainly something to keep your eye on! In regard to today’s battle lines, we are once again watching the swap demand area at 1169.8-1162.5 (located within a daily swap demand area at 1169.8-1154.7), and also the swap at 1187.5. For trades taken at either of the above said levels, we would advise waiting for lower timeframe confirmation due to the following:
1. A trade short from 1187.5 is susceptible to a fakeout as we saw last Thursday.
2. The swap demand base at 1169.8-1162.5 may have held price once already but that does not mean it will happen again. Be prepared for a fake below here, which, as a result will see price trade very deep within the daily swap demand base mentioned above at 1169.8-1154.7.
Levels to watch/ live orders:
• Buys: 1169.8-1162.5 Tentative – confirmation required (Stop loss: dependent on where one confirms this zone since a fake lower could very well take place).
• Sells: 1187.5 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) 1199.5 (Stop loss: 1208.3).