ICmarkets
Short

Clear price action being seen on Gold...

FX:XAUUSD   Gold/U.S. Dollar
267 0 9
With the US dollar             taking a hit yesterday, we saw the yellow metal react by rallying higher. H4 supply at 1277.1-1272.4 (now acting demand) was taken out as a result, and this allowed bullion to clock a high of 1291.7 into the close. We initially reported that should price retest this H4 boundary as demand followed by a reasonably sized H4 bull candle, one could look to go long from here targeting the daily resistance level at 1301.5. Unfortunately, there was no retest seen.

Our suggestions: Ok, on the weekly chart we know that price currently occupies a resistance area coming in at 1307.4-1280.0. Additionally, we know that the above said daily resistance level sits within the top edge of this weekly resistance area. Following on from this, we can see from the H4 chart that the highway north is relatively ‘resistance free’ up to that said daily resistance. On account of these points, our team is now watching the daily resistance level at 1301.5 very carefully, as between here and the H4 61.8% Fib resistance at 1304.5 (green line), a bounce is likely to take place.

Of course, it is down to the individual trader how he/she wishes to enter short here. Considering ourselves to be relatively conservative we’re opting to wait for a H4 bearish close to form, prior to pulling the trigger.

Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 1304.5-1301.5 (H4 bearish close required, stop loss: ideally beyond the trigger candle).
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