Interesting PA on gold, traders...
XAU/USD (GOLD):
XAU/USD bulls, as you can see, lost their flavour at highs of 1324.5 Monday, peaks not seen since late February. Erasing 0.48% Tuesday, the price of gold fell sharply from the underside of a daily supply zone coming in at 1333.1-1323.4, which houses within it a Quasimodo resistance level at 1326.3. This supply commands additional weight in that we printed a lower low at 1281.0 (March 7), breaking the 1302.4 Feb 14 low (blue arrows), potentially signalling a shift to the downside.
Contrary to daily flow, however, the technical landscape on the weekly timeframe, after clearing its 2018 yearly opening level at 1302.5, displays a reasonably clear run towards the 1346.7 Feb 18 high, as well as nearby resistance parked at 1357.6.
A closer reading of price action on the H4 timeframe saw the candles fail to sustain gains beyond February’s opening level at 1321.0, likely helped by the fact daily supply mentioned above at 1333.1-1323.4 recently entered the fray. In addition to this, price has also been compressing within an ascending channel pattern (low: 1280.4 high: 1311.3) since March 7.
Areas of consideration:
While the threat of further buying on the weekly timeframe is there, the daily supply area currently in motion is appealing. To confirm downside presence, traders are urged to wait for a H4 close to print beyond the current channel support. This, given we’re coming from daily supply, is likely enough to encourage further selling.
Ultimately, a retest to the underside of the broken channel support as resistance is favoured, targeting the 2018 yearly opening level underlined above on the weekly timeframe at 1302.5. An added bonus would be H4 price chalking up a candlestick signal at the retest, consequently identifying seller intent and also serving as a base to determine entry and risk levels.
XAU/USD bulls, as you can see, lost their flavour at highs of 1324.5 Monday, peaks not seen since late February. Erasing 0.48% Tuesday, the price of gold fell sharply from the underside of a daily supply zone coming in at 1333.1-1323.4, which houses within it a Quasimodo resistance level at 1326.3. This supply commands additional weight in that we printed a lower low at 1281.0 (March 7), breaking the 1302.4 Feb 14 low (blue arrows), potentially signalling a shift to the downside.
Contrary to daily flow, however, the technical landscape on the weekly timeframe, after clearing its 2018 yearly opening level at 1302.5, displays a reasonably clear run towards the 1346.7 Feb 18 high, as well as nearby resistance parked at 1357.6.
A closer reading of price action on the H4 timeframe saw the candles fail to sustain gains beyond February’s opening level at 1321.0, likely helped by the fact daily supply mentioned above at 1333.1-1323.4 recently entered the fray. In addition to this, price has also been compressing within an ascending channel pattern (low: 1280.4 high: 1311.3) since March 7.
Areas of consideration:
While the threat of further buying on the weekly timeframe is there, the daily supply area currently in motion is appealing. To confirm downside presence, traders are urged to wait for a H4 close to print beyond the current channel support. This, given we’re coming from daily supply, is likely enough to encourage further selling.
Ultimately, a retest to the underside of the broken channel support as resistance is favoured, targeting the 2018 yearly opening level underlined above on the weekly timeframe at 1302.5. An added bonus would be H4 price chalking up a candlestick signal at the retest, consequently identifying seller intent and also serving as a base to determine entry and risk levels.
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