Gold currently trades around 1660$. Recent price action has found strong resistance near the 1700$ level. We are bullish long-term for gold as long as it stays above 1550$. But we can not trade using that level as a stop….unless you have bought at 1560….nevertheless we have to adjust our strategy to current price action. What has Gold done since 1800$?It is declining making and lower highs. As shown below, we count this decline as corrective. The rise from 1550 to 1800 is seen as , therefore we are correcting now this move. A bottom has formed around the 61,8% , but prices do not have clear moves upwards. Additionally resistance at 1700 has not been broken.
The bottom line is that in order for our bullish scenario to be back on track, prices must rise above the 1700 resistance where both the downward trend line is and the stands. Until this is done, prices could continue their downtrend towards 1600$. In the very short-term horizon (1 hour) support is found at 1652$.
If you need more help trading gold try our premium services. As always, thank you for taking the time to catch up on my thinking.
In technical analysis, Fibonacci retracements are used to mark potential turning points in a trend by identifying static support and resistance. The most popular potential reversal points are calculated by taking the distance from the low to the high of the trend and measuring 38.2%, 50%, and 61.8% from the top of the up trend (the bottom in case of a down trend).
A chart used in technical analysis that shows support and resistance, and momentum and trend directions for a security or investment. It is designed to provide relevant information at a glance using moving averages (tenkan-sen and kijun-sen) to show bullish and bearish crossover points. The "clouds" (kumo, in Japanese) are formed between spans of the average of the tenkan-sen and kijun-sen plotted six months ahead (senkou span B), and of the midpoint of the 52-week high and low (senkou span B) plotted six months ahead.