ICmarkets

Gold: Technical outlook and review.

FX:XAUUSD   Gold/U.S. Dollar
385 3 5
Weekly Timeframe: In all honesty, we did not expect there to be that much selling interest around the weekly support swap level at 1202.91, clearly there was, as price broke below the previous week’s low seen at 1174.96. As per this timeframe, the buyers and sellers are currently trapped between 1202.91 and a weekly decision-point demand level coming in at 1136.30. Let’s see what we can find on the lower timeframes.

Daily Timeframe: For anyone who follows our analysis on a regular basis, you may recall us mentioning that if price significantly closed below 1182.01, our bias would therefore not remain long. As we can all see, on Friday this did indeed happen, and as such, this has likely cleared the path south down towards an area of support seen at 1149.42. It will be interesting to see what the 4hr timeframe shows.

4hr Timeframe: The 4hr timeframe shows that just before the market closed on Friday, the sellers aggressively sold price past 1174.33 into a minor 4hr resistance flip level seen at 1166.99. Buying here may not be the best path to take for two reasons:

1. Price has just reacted off of a weekly support swap level at 1202.91, and broke a major daily support swap level coming in at 1182.01.

2. Risk/reward considerations argue against entering long here with prices in close proximity to potential resistance (1174.33).

Assuming that price breaks below 1166.99, which we believe it very likely will, the path south is then potentially free down to a 4hr demand area coming in at 1146.76-1154.80 (encapsulates the daily decision-point demand level at 1149.42). In the event that the above is seen, we would firstly attempt to try and enter short at a possible retest of 1166.99 (tentative sell orders are seen just below at 1166.27), and then consider buying around the 1156.07 (just above the aforementioned 4hr demand area) mark which would be where we’d exit our short position.

Both trades will require lower-timeframe confirmation in our opinion. The reason why we would not enter here with a straight pending buy order is simply because price may ignore this area of demand, and trade into the more attractive higher-timeframe weekly decision-point demand level seen just below at 1136.30.

Buy/sell levels:

• Buy orders: 1156.07 (Predicative stop-loss orders seen at: 1145.87).

• Sell orders: 1166.27 (Predicative stop-loss orders seen at: Dependent on where one confirms this level).

farraceiqkwan
2 years ago
There's a pin bar formed on the weekly chart, what do you think?
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Ghostrider7
2 years ago
I also like the 1136 demand level for a short term bounce.
Reply
ICmarkets PRO
2 years ago
Hi farraceiqkwan,

The weekly pin-bar candle I think you're referring to was formed four weeks ago, we did include this in our analysis then, but with weekly resistance 1202.91 looming just above, a long entry purely based off of this would not have given good enough risk/reward, or was it another pin-bar candle you meant?

Ghostrider7,

Yes, we do too, notice this is a serious level on the weekly timeframe coming in at exactly 1136.30.

Good luck trading guys

ICmarkets
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