Gold is trading at 1169 resistance

Gold is trading at 1169 resistance

Gold is trading at 1169 resistance

Gold, Weekly
In my previous report I took the view that the price of gold has scope to move somewhat higher – even up to 1200 – 1232 range. I also wrote that we should see some bottoming action above the 1097 support and that could correct lower from the levels current at the time of the report. I said that if 1135 level breaks the next significant daily support level is in 1098 -1112 bracket. All this played out well. Price moved lower and after a wild swing higher moved to a support range I mentioned. After printing a weekly bar low at 1103 price has had a significant rally from this support range.

After creating two higher weekly lows the price of gold last week broke through and is now trading outside of medium term bearish channel. The width of the channel points almost exactly to the upper end of the long term bear channel at approx. 1260. This level roughly coincides with the 23.6% Fibonacci level at 1252. Gold is currently trading near 61.8% Fibonacci level and a previous support (now a resistance). At the same time Stochastics has moved right at the threshold of overbought territory. Price is getting close to the 50 week moving average while the upper Bollinger Bands are not very far from the current market price. The nearest resistance is at a pivotal weekly high at 1169 while nearest major weekly support is at 1103.

Chart_15-10-12_15-24-24

Gold, Daily

Price is trading near a resistance area between 1169 and 1187 created by a previous sideways move. While moving averages (30 and 50 SMA) indicate the short term trend is higher Stochastics is overbought while price is trading above the upper 2 standard deviation Bollinger Bands. The nearest potential support is at 1152 – 1154 region while the resistance area is wider, from 1169 to 1187. Since August the price of gold has formed a triangular formation and a projection from the triangle points to 1221 – 1232 resistance range.

Chart_15-10-12_15-24-51

Gold, 240 min

Price is trading near 1169 resistance and right at the top of a regression channel while Stochastics are in the overbought zone and moving sideways. This is a sign of momentum slowing down. At the same time price is trading outside the upper Bollinger Bands. Previous pivotal candle high at 1170 is very near to the current market price. The nearest 4h hour support level is at 1158.50 while the area between 1135 and 1143 is support range. Should this not hold, the next support range at 1104 – 1112 comes into play.

Conclusion

The higher lows in the weekly chart point to higher prices but there are several technical factors likely to slow the price down. Historical resistance at current levels, together with the proximity of 50 week SMA and the upper Bollinger Bands that coincide with 50% Fibonacci retracement are a challenge for the bulls. I expect this combination to turn the price of gold down to 1104 – 1125 support range. The 4h support range at 1104 – 1112 is a likely level to cause a rally should the price correct that far. Look for momentum reversal signals in the lower timeframes to confirm the analysis for both longs and shorts.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokersofficial website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

jmutaJanne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.

Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.


“My mission is to help you to become a confident and successful trader”

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

GOLD TRADING AT DAILY RESISTANCE AFTER A HIGHER WEEKLY LOW

Gold trading at daily resistance after a higher weekly low

Gold, Weekly

Gold created a higher low in the weekly chart at levels where the downside was getting limited. I wrote in the previous report that after moving lower for three weeks it is not likely that price will have another significant down move and added that the Fed’s not expected to hike rates (only 28% probability for September rate hike). And furthermore, gold was trading relatively near levels that attracted buyers the last time. Now, whenever a market can’t move lower the probabilities of it moving up are higher. Gold rallied over the last three days with the market’s anticipating Fed’s decision to leave the rates untouched.

After last week’s close was decisively higher than the previous week’s high we now have a higher pivotal low in place. This is an early indication that the market might be attempting to rally from here. In terms of the long term down trend the price of gold has lately been close to the lower end of its likely range. Together with the higher low this suggests that we might see a corrective move inside the long term downtrend. For this to happen we should see some base building first. This would mean price reacting lower and testing the support again or creating another higher low. Weekly support and resistance levels are at 1097 and 1170.

Chart_15-09-21_13-25-01

Gold, Daily

The price of gold rallied to pivotal resistance between 1134 and 1147. This bracket is fairly close to the upper daily Bollinger bands while Stochastics are in the overbought area. The same goes with the RSI (7) and Money Flow Index (7). The move higher from 1098 support has been strong. Pivotal resistance area was reached with three wide range candles. However, this doesn’t mean that the price can’t correct lower. Price is trading at resistance and we should follow the intraday resolutions to get clues if and when gold starts to roll over. There is some support at 1136, caused by the daily high from Thursday last week. Significant daily support and resistance levels are at 1112 and 1147.

Chart_15-09-21_13-25-11

Gold, 240 min

Lack of momentum is not surprising after such a quick move into a significant resistance. This is manifested in a sideways move that has created a small triangular flag formation and indicates that some of the players have cashed their chips after the three day rally. Stochastics is pointing downwards suggesting overbought conditions while price is trading inside a pivotal resistance created on September 1st.  The nearest significant 4h support and resistance levels are at 1123 and 1147.

Conclusion

In the long term (weekly) picture we have early signs of an attempt to move to the upper parts of the channel. The lack of commitment from the Fed to raise rates has helped to create a higher weekly low, which is a significant indication of strength coming into this market and acts as an early indication that the price of gold has scope to move somewhat higher – even up to 1200 – 1232 range. However, before that we should see some bottoming action above the 1097 support. In the daily time frame price is at a resistance that coincides with the upper Bollinger Bands which suggests that the market could correct lower from here. RSI, MFI and Stochastics are right at the overbought area supporting the idea. Intraday support at 1135 holds the price up but at the time of writing but if that level breaks the next significant daily support level is in 1098 -1112 bracket. If gold breaks out of the triangle to the upside and manage to move beyond the 1147 resistance, the next likely target range is at 1170 – 1186. 

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokersofficial website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

jmutaJanne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.

Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.


“My mission is to help you to become a confident and successful trader”

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Gold trading near support area after three down weeks

Gold trading near support area after three down weeks

Gold, Daily

Gold still in downtrend as confirmed by downward price channel and yet another lower high in the weekly picture. This was once again formed at levels that used to support price and at 38.2% Fibonacci level identified in the previous report.  Price rallied to the level in response to a strong move lower in US stock market. Since then price of gold has moved down for three weeks and is now trading close to the top of the two weeks’ sideways range (1104) from the end of June and the lower 1.5 sd Bollinger Band. Over the last two days price has been moving sideways at this 1103 – 1104 support, a level that resisted price advances at the end of July. Price is also trading at the lower daily Bollinger Bands while Stochastics are oversold. Daily support levels are at 1080 and 1103 while resistance levels are at 1117 and 1147.30.

Chart_15-09-14_14-11-11

Gold, 240

In 4h picture Gold is also trending lower. This is indicated by price moving inside a downward price channel and the 50 period SMA. Current price action is taking place at the lower end of the channel and at the lower Bollinger Bands. Stochastics has created a higher low after price formed a hammer candle on Friday. There is support in 1093 – 1098 bracket while the nearest resistance area is between 1109 – 1115.

Chart_15-09-14_14-06-13

Gold, 15 min

In 15 min chart the price of gold has moved below a rising trendline after reversing at 1108 – 1108.80 resistance. Price action suggests that the current range between 1106 and 1108 should be resolved to the downside and towards a 50% Fibonacci level at 1103 while the next support level is at 1101.

Conclusion

Trading should be range bound this week before the Fed announcement on Thursday. However, once the market participants know what the result is it support and resistance levels further away will become relevant. After moving lower for three weeks it is not likely that price will have another significant down move this week. Fed’s not expected to hike rates (only 28% probability for September rate hike) and price is trading relatively near levels that attracted buyers the last time. However, gold is in a long term downward trend. It is therefore likely that the demand at support levels will be eventually absorbed. Regression channel analysis in 4h chart indicates that gold is trading at the lower end of its likely range. This is confirmed by the Bollinger bands. Shorts should therefore factor this into their trading and be more careful as price might not have similar swings to the down side that I had last week. As the price is in downtrend and there are resistance levels fairly close by I expect gold will move further into the support area between 1080 and 1103 but the moves can be short lived and lead to a rally. If it takes place I expect the move run into a resistance at 1134 – 1153 area.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokersofficial website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

jmutaJanne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.

Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.


“My mission is to help you to become a confident and successful trader”

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.