ICmarkets

Gold: Weekly technical outlook and review...

FX:XAUUSD   Gold/U.S. Dollar
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Weekly view: As can be seen from the weekly chart, the price of Gold             declined over $13 in value from the underside of supply coming in at 1205.6-1181.2 last week, consequently painting a bearish inside candle going into the close 1164.4. Nevertheless, looking to sell this bearish pattern from here this week is tricky since price is now trading at a swap support barrier seen at 1157.4. Let’s take a look lower down to see what’s on offer…

Weekly levels to watch this week fall in at: 1205.6-1181.2/1157.4.

Daily view: From this angle, we can see that daily movement was capped last week between a swap demand area coming in at 1169.8-1154.7, and a supply zone drawn from 1187.6-1179.6. We have little interest in these areas this week to be honest. What we do have our beady little eye on though is the surrounding zones – supply at 1205.6- 1198.3 and demand taken from 1136.5-1145.0. This supply is particularly attractive due to it being tightly lodged within the aforementioned weekly supply zone . The demand, however, can be seen just below the aforementioned weekly swap (support) level, which could provide pro money a nice base in which to facilitate a fakeout this week.

Daily levels to watch this week fall in at: 1205.6- 1198.3/1136.5-1145.0.

4hr view: (Slightly revised)

Amid Friday’s trade price aggressively sold off from a high of around 1179.2, breaking below Thursday’s low 1162.4 and connecting with trendline support taken from the low 1130.0.

This morning’s open 1164.4 saw little change and shows price still hovering above the aforementioned trendline support. Now, as per this timeframe and keeping the higher timeframe structures in mind, this is what we’re looking at right now:

• Buying from the trendline is possible, but with no converging structures, we intend to keep our distance!

• Should price respond bullishly to the current trendline support, however, we’ll then be eyeing the resistance area at 1180.7-1176.9, followed closely by the swap resistance level at 1187.5. Although both areas are located within the boundaries of daily supply at 1187.6-1179.6, entering at market here would be risky in our opinion. Notice that daily supply area has already been breached (15/10/15) thus indicating potential weakness. This is not to say a reaction will not be seen from either of the above said 4hr areas, it is just we’d feel more comfortable shorting WITH lower timeframe confirmation than blindly entering short and hoping for the best.

• The Quasimodo support base at 1151.7-1154.7 is an interesting zone. Not only does it have strong momentum from the base back on the 13th October, it also converges nicely with a swap support level at 1153.7 and is located just below the daily swap (demand) area at 1169.8-1154.7. We would consider an intraday long from here should lower timeframe confirmation also form.

• Demand at 1136.5-1140.7. This area is a beauty! It is located deep within daily demand mentioned above at 1136.5-1145.0, and also coincides nicely with the 61.8% Fibonacci level at 1137.7. Dependent on the time of day, we would consider a market buy here!

Levels to watch/ live orders:

• Buys: 1151.7-1154.7 Tentative – confirmation required (Stop loss: dependent on where one confirms this area) 1136.5-1140.7 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: 1180.7-1176.9 Tentative – confirmation required (Stop loss: dependent on where one confirms this area) 1187.5 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).
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