Gold to Resume Lower?
- Cyclical turning point this week
- Weakness in metal after Friday would confirm top
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
The price action in Gold leading into this week’s turn window has been less than ideal. Given the strong downtrend trend in place since mid-March we were initially looking for a low to develop. The metal, however, found support early last week from just under the 50% retracement of the December/March advance at 1285. The recovery that has followed has not been very impressive retracing only just over 38% of the decline from 1292. In terms of time though it is long enough to qualify as a “trend” and any weakness that develops over the next few days would confirm a minor cyclical top is in place in the metal and set the stage for a possible resumption of the medium-term downtrend. Only a move back through this week’s high (next week) would invalidate and re-focus higher.
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Gold Daily Chart: April 10, 2014
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in Coming Sessions:
LEVELS TO WATCH
Resistance: 1324 (WTD high), 1335 (Fibonacci)
Support: 1296.95(Tuesday’s low), 1277 (MTD low)
Strategy: Sell Gold on weakness
Entry: Sell XAU/USD on a 1300 stop
Stop: 1-day close above 1335
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail firstname.lastname@example.org. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.