Long from 1249.2 at confluence...

19 May 2017

With the US dollar entering into recovery mode yesterday, the price of gold declined. Before this happened though, the unit beautifully tapped the underside of a H4 61.8% Fib resistance at 1264.5 (green line) extended from the high 1295.4. This line – coupled with a H4 supply barrier coming in at 1268.3-1262.7 and a H4 trendline resistance (again) taken from the high 1295.4 was, as highlighted in Thursday’s report, a zone to watch for selling opportunities. Well done to any of our readers who managed to net some green pips here! The selloff brought the yellow metal down to the take-profit target, another interesting place on the H4 chart: March/April’s opening levels at 1245.9/1248.0, which happens to merge beautifully with a H4 trendline support etched from the high 1278.0.

Our suggestions: Buying from 1245.9/1248.0 is tempting given the trendline confluence and the fact that weekly price recently traded from demand at 1194.8-1229.1 and shows room to advance. However, one might want to take into account that daily action resides around the underside of a resistance zone marked at 1265.2-1252.1 which could, of course, halt buying. Despite this, the recently closed H4 candle printed off 1245.9/1248 was strong, in our opinion. This, along with all the other noted points suggesting that the bulls may take control, was enough for our team to buy at 1249.2, with a stop positioned just below at 1244.9. Our take-profit target is currently set around the underside of the said H4 trendline resistance.