ICmarkets

Interesting price action currently being seen on Gold

FX:XAUUSD   Gold / U.S. Dollar
547 0 5
Weekly Timeframe: The weekly timeframe shows that Gold             has dipped below the weekly swap level seen at 1222.2, which may have opened the gates for further downside towards a weekly demand area coming in at 1166.8-1195.0.

Daily Timeframe: Yesterday’s trading action on the daily timeframe saw Gold             sell off and close below a significant daily decision-point demand area at 1224.9-1235.7. This in turn forced the market down towards another daily decision-point demand area coming in at 1204.4-1216.5.

4hr Timeframe: The recent descent saw Gold             take out a 4hr demand area seen at 1224.9-1232.1, and attack the swing low seen from the 12/01/15 at 1217.3. In the event that this swing low gives way, price will likely continue drilling south towards a 4hr demand area seen at 1204.4-1210.6, which if you look on the daily timeframe , you’ll see it is located deep within the daily decision-point demand area mentioned above at 1204.4-1216.5.

Let’s quickly recap here so that we’re all on the same page. The weekly chart is currently indicating room for price to move south following the break of 1222.2, meanwhile on the daily chart , we can see price is trading around the base of a daily decision-point demand area (for levels see above) at the moment. So, where does this leave us on the 4hr timeframe? Well, just because the weekly chart has broken a support level , it does not necessarily mean price will automatically continue south. This is especially true when we have supporting demand coming in from the daily timeframe (as just mentioned above). Therefore, we believe if price is going to decline in value, it will only likely do so down towards the 4hr demand area at 1204.4-1210.6, and if price holds here, and shows strength, we feel there is a good chance a fakeout below the weekly support level may be in process. That being the case, our team will expect Gold             to increase in value, and as such we’ll be keeping a close eye on the lower timeframes for any confirmed buy trades around the 1211.7 mark as shown by the green arrows.

Current buy/sell orders:

• Buy orders: 1211.7 (Predicative stop-loss orders seen at: 1203.4).

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

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