Our thoughts on gold this morning...
Over the last few sessions, we have seen H4 price put together a consolidation zone formed by a resistance area penciled in at 1229.1-1231.6 and a demand base coming in at 1216.7-1219.3. While traders who only focus on one timeframe may feel that this market is likely headed south due to the medium-term downtrend that we are currently in on the H4 timeframe, the higher-timeframe picture would suggest otherwise!
Scrolling over to the weekly timeframe, the buyers and sellers are seen battling for position around the top edge of a demand zone at 1194.8-1229.1. This demand has held price higher once already back in early May, so there’s a solid chance that history may repeat itself here. In conjunction with the weekly timeframe, daily price also shows the yellow metal trading from a demand at 1214.1-1225.5, which happens to be positioned within the said weekly demand area.
While the H4 candles could remain bouncing from the H4 range extremes this week, we do not believe this consolidation will give way to the downside for reasons stated above.
As mentioned in yesterday’s analysis, a level that has sparked some interest is the H4 resistance base penciled in at 1235.0, due to its connection with the daily trendline resistance seen extended from the low 1180.4. Still, shorting from this line would still entail one going against potential weekly buying power.
With that in mind, it would not be until a decisive H4 close above 1235.0 is seen, would our team consider buying as an option.
Our suggestions: Typically, we try to avoid trading against higher-timeframe flow. And selling 1235.0 would place us against potential weekly flow! Therefore, our desk is going to remain on the sidelines and wait and see if the H4 bulls can do us proud and close above 1235.0 for possible longs up to April’s opening level at 1248.0.
Levels to watch/live orders:
• Buys: Watching for 1235.0 to be consumed on the H4 chart before buying becomes an option.
• Sells: Flat (stop loss: N/A).
Scrolling over to the weekly timeframe, the buyers and sellers are seen battling for position around the top edge of a demand zone at 1194.8-1229.1. This demand has held price higher once already back in early May, so there’s a solid chance that history may repeat itself here. In conjunction with the weekly timeframe, daily price also shows the yellow metal trading from a demand at 1214.1-1225.5, which happens to be positioned within the said weekly demand area.
While the H4 candles could remain bouncing from the H4 range extremes this week, we do not believe this consolidation will give way to the downside for reasons stated above.
As mentioned in yesterday’s analysis, a level that has sparked some interest is the H4 resistance base penciled in at 1235.0, due to its connection with the daily trendline resistance seen extended from the low 1180.4. Still, shorting from this line would still entail one going against potential weekly buying power.
With that in mind, it would not be until a decisive H4 close above 1235.0 is seen, would our team consider buying as an option.
Our suggestions: Typically, we try to avoid trading against higher-timeframe flow. And selling 1235.0 would place us against potential weekly flow! Therefore, our desk is going to remain on the sidelines and wait and see if the H4 bulls can do us proud and close above 1235.0 for possible longs up to April’s opening level at 1248.0.
Levels to watch/live orders:
• Buys: Watching for 1235.0 to be consumed on the H4 chart before buying becomes an option.
• Sells: Flat (stop loss: N/A).
Haftungsausschluss
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