Interesting price action visible on gold, traders...

19. Dez. 2018

XAU/USD (Gold):

Although the price of gold advanced 0.30% Tuesday, much of the technical landscape remains unaffected.

Kicking things off from the weekly timeframe this morning, buyers appear in good health off swing resistance-turned support at 1236.6. Further buying from current price draws in resistance at 1260.8. What’s also interesting about 1260.8 from a technical perspective is it converges closely with an AB=CD bearish completion point (black arrows) and a 50.0% resistance value at 1263.4 (green).

Daily movement reveals similar structure to the weekly timeframe. The only real difference between the two falls between the next upside target. While weekly price shows we’re likely heading for resistance at 1260.8, daily flow could possibly surpass this area to shake hands with channel resistance (etched from the high 1214.3). It might also be worth noting on the daily timeframe we have a nice-looking supply zone at 1272.5-1261.5 converging with the noted channel resistance.

A closer reading brings in the H4 candles which are seen engaging with supply priced in at 1253.5-1248.8. Note this area held price action lower last week. Should we manage to overthrow this zone this week, the next port of call in terms of upside targets likely falls in around weekly resistance at 1260.8.

Areas of consideration:

There appear to be two options going forward:

1. H4 price retreats from the current H4 supply area and retests H4 support at 1241.0. Should H4 price retest the level in the shape of a bullish candlestick pattern (entry/stop parameters can be defined according to this pattern), this, along with both weekly and daily charts exhibiting room to press higher, is likely enough to draw in buyers with an ultimate target placed at the weekly resistance level highlighted above at 1260.8.

2. An alternative to (1), and likely the more conservative approach, is to wait and see if H4 price engulfs the current supply zone BEFORE looking to tackle this market long. An ideal scenario would be for the unit to engulf the supply and pullback to the aforementioned H4 support level for a long. That way, traders can be relatively confident the majority of sellers from supply are consumed.