Beginning with the weekly timeframe this morning, price is seen toying with the top edge of a weekly resistance area drawn from 1205.6-1181.3, and its converging weekly trendline resistance extended from the low 1130.1. Since this weekly area boasts historical significance, it may be worth waiting for the weekly candle to close before presuming that this weekly zone is consumed. Moving down to the daily charts, yesterday’s session printed a relatively strong-looking bearish engulfing candle within the walls of a daily supply area at 1220.9-1212.0. On the condition that follow-through selling is seen from here, the next downside target in range is the daily support area logged in at 1197.4-1187.7.
Stepping across to the H4 chart, the H4 Quasimodo resistance level at 1217.5 continued to hold firm yesterday, forcing bullion down to lows of 1206.5. The next area of interest on this scale falls in at 1198.4-1203.8: a H4 demand zone, boasting confluence from a H4 trendline support drawn from the low 1187.7 and a H4 Fib 61.8% support at 1204.8.
Our suggestions: While the current H4 demand base will likely produce a bounce today, it may not be anything to get excited about. Let’s not forget where price is coming from on the bigger picture! The daily bearish engulfing candle that formed within daily supply could, in our opinion, be enough to wipe out this area and push price lower to the aforementioned daily support area. If one still considers the H4 demand base to be valid, we would strongly recommend waiting for a reasonably sized H4 bull candle to form, before pressing the buy button!
Stepping across to the H4 chart, the H4 Quasimodo resistance level at 1217.5 continued to hold firm yesterday, forcing bullion down to lows of 1206.5. The next area of interest on this scale falls in at 1198.4-1203.8: a H4 demand zone, boasting confluence from a H4 trendline support drawn from the low 1187.7 and a H4 Fib 61.8% support at 1204.8.
Our suggestions: While the current H4 demand base will likely produce a bounce today, it may not be anything to get excited about. Let’s not forget where price is coming from on the bigger picture! The daily bearish engulfing candle that formed within daily supply could, in our opinion, be enough to wipe out this area and push price lower to the aforementioned daily support area. If one still considers the H4 demand base to be valid, we would strongly recommend waiting for a reasonably sized H4 bull candle to form, before pressing the buy button!
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