GOLD Weekly Technical Report:
The past week saw the yellow metal push lower and form a weekly bearish engulfing candle. Should this candle formation be of concern for traders who are currently long from the weekly demand at 1251.7-1269.3? It is difficult to judge from where we’re sitting. Here’s why. On the one hand, this weekly demand is bolstered by a weekly channel support. Etched from the low 1122.8, therefore promoting strength. On the other hand, each time the demand base is tested, price fails to print a higher high. Which could mean that sellers are overwhelming buying momentum here.
Last week’s descent has placed daily candles within touching distance of daily demand at 1251.7-1265.2. Which is not only positioned within the lower limits of the weekly demand mentioned above. It also houses a 61.8% daily Fib support at 1263.3. With the US dollar taking a hit during Friday’s US segment, it was no surprise to see that gold had advanced. Leaving August/November’s opening levels seen on the H4 timeframe at 1269.3/1269.9 unchallenged, the metal aggressively ran through October’s opening level at 1279.1 and slammed into a H4 broken Quasimodo line at 1286.8, which was enough to force the H4 candles to pullback and retest Oct’s open level into the closing bell.
Suggestions: From our perspective, this is a somewhat difficult market to trade at the moment. Weekly action is challenging to read given the conflicting price action and H4 price does not show enough confluence to base a trade from. With the above notes in mind, we see little choice but to remain on the sidelines today.
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