Weekly levels to watch this week fall in at: 1157.4/1205.6-1181.2/1074.6.
Daily view: Turning our attention to the reveals that Gold only began climbing higher from Wednesday onwards last week. Supply at 1126.7-1118.9 was taken out and offers were triggered in at supply just above it at 1147.8-1134.2, which is where price concluded trade for the week. A break above current supply would likely force this market to challenge the swap coming in at 1167.2. Selling from the current supply on the other hand is tricky, as there is possibly a floor of active bids sitting just below at the recently broken supply, which, of course, is now demand. It will be interesting to see what the 4hr timeframe has to offer…
Daily levels to watch this week fall in at: 1147.8-1134.2/1126.7-1118.9/1167.2.
4hr view: From the pits of the 4hr timeframe, we can see a nice-looking pattern printed last week (green arrows) from the swap at 1102.4, which appears to have terminated at supply coming in at 1142.3-1137.9.
Selling from the current supply is certainly tempting considering that this base not only sits within the daily supply mentioned above at 1147.8-1134.2, but also shows room to move lower to at least demand at 1134.2-1131.8. On top of this, let’s not forget the approach – a reversal pattern!
However, selling from this barrier could potentially put you against weekly flow since there is little weekly resistance backing our 4hr supply area up. Therefore, we’d highly recommend only entering short at this zone should lower timeframe selling confirmation also be present.
Should our analysis be correct, and Gold does indeed decline in value, we would be interested in looking for confirmed buys at 1124.6 – an ignored Quasimodo level. Why this level, and not the demand at 1134.2-1131.8? Well, for starters, this area has ‘fakeout’ written all over it. It may look fresh, but this may be to tempt traders to buy here, and place their stops where? You guessed it! Right below the zone – a perfect pool of liquidity to buy into, hence the fakeout zone. In addition to this, if you scan across to the , you will notice that this ignored Quasimodo level sits nicely within the recently broken supply at 1126.7-1118.9, and the fresh 4hr demand is not! Which area would you rather buy at???
Levels to watch/ live orders:
• Buys: 1124.6 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).
• Sells: 1142.3-1137.9 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).