Weekly closing price: 1251.8
Weekly opening price: 1251.8
Weekly view: Beginning with the this morning, we can see that price, once again, was hammered lower last week, reaching lows of 1243.7. Some will very likely disagree with us when we say that we think the yellow metal still has potential to decline further over the coming weeks. We firmly believe the next downside target sits around demand coming in at 1205.6-1181.2 which has already bounced price twice already (22/02/16 – 28/03/16). It will be interesting to see what the lower timeframes have to offer…
Daily view: From this viewpoint, gold spent Thursday and Friday’s sessions trading in a relatively tight range, just ahead of support extended from the low 1205.4. Directly below this line also stands a demand base drawn from 1223.7-1233.3, which held this market higher once already back in April. Both of these barriers could very well bounce price this week, but to say that either is a reversal point is not really something we would agree with due to what we’ve seen weekly price do over the past three weeks (see above).
H4 view: Stepping across to the H4 chart, it is relatively clear to see that market participants are now capped between supply seen at 1261.1-1258.1 and demand fixed from 1237.5-1243.9. With all three timeframes in mind, our team can see that the current H4 demand fuses beautifully with the aforementioned daily . Furthermore, the smaller H4 seen below at 1231.1-1234.4 also sits within daily demand coming in at 1223.7-1233.3.
Our suggestions: Although we believe this market is headed lower, price can and will likely bounce from both of the above said H4 demand zones due to each joining together with higher-timeframe zones (see above). Therefore, for now, our team will be watching both of these H4 areas for potential trades into this market. However, please bear in mind that WE ARE NOT placing pending orders at these zones and will only enter from either base upon satisfactory lower timeframe price action. This could be either a lower timeframe supply engulf and return, a break/retest or simply a collection of buying tails around lower timeframe support or better still at the extremes of the higher-timeframe zone itself.
Levels to watch/live orders:
• Buys: 1237.5-1243.9 Tentative – confirmation required (Stop loss: dependent on where one confirms this area). 1231.1-1234.4 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: Flat (Stop loss: N/A).