Interesting P.A on gold this morning...
Across the board, the USD advanced higher with the DXY firmly reclaiming 95.00 status. Demand for the US dollar placed bullion under pressure on Thursday, pulling the H4 candles towards Quasimodo support sited at 1207.1. Although this level is bolstered by H4 RSI divergence (blue line) out of oversold territory, buying pressure from this base is likely weak. Our rationale behind this approach stems from the bigger picture.
Weekly price edged beneath support at 1214.4 in recent trade. On the grounds sellers remain defensive beneath this number, little support is seen until we reach 1150.9: the 2017 yearly opening level. Why we believe the path could be free this far south comes from seeing little active demand to the left of current price. Daily movement, on the other hand, is seen poised to attack demand coming in at 1195.1-1204.1, which could hinder downside today/next week.
Areas of consideration:
Entering long off the current H4 Quasimodo support has far too many opposing themes against it, in our view. The risk is just too great. Should a bounce from this level come to fruition, though, shorts off nearby H4 trend line resistance (taken from the high 1265.9) could be an option, with an overall target set around the top edge of daily demand at 1204.1.
Longs from the daily demand mentioned above at 1195.1-1204.1, nonetheless, are also something to consider. A bounce from this region may force the yellow metal to retest the recently broken weekly support as resistance at 1214.4 – an ideal take-profit level!
Weekly price edged beneath support at 1214.4 in recent trade. On the grounds sellers remain defensive beneath this number, little support is seen until we reach 1150.9: the 2017 yearly opening level. Why we believe the path could be free this far south comes from seeing little active demand to the left of current price. Daily movement, on the other hand, is seen poised to attack demand coming in at 1195.1-1204.1, which could hinder downside today/next week.
Areas of consideration:
Entering long off the current H4 Quasimodo support has far too many opposing themes against it, in our view. The risk is just too great. Should a bounce from this level come to fruition, though, shorts off nearby H4 trend line resistance (taken from the high 1265.9) could be an option, with an overall target set around the top edge of daily demand at 1204.1.
Longs from the daily demand mentioned above at 1195.1-1204.1, nonetheless, are also something to consider. A bounce from this region may force the yellow metal to retest the recently broken weekly support as resistance at 1214.4 – an ideal take-profit level!
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