We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • S&P 500, Dow Jones, Nasdaq explode higher with stocks surging in response to shockingly better-than-expected monthly jobs data. Get your #equities market update from @RichDvorakFX here: https://t.co/nuMVWOzzuC https://t.co/M3nGBjd7kZ
  • The record-breaking NFPs increase behind us and the FOMC rate decision on Wednesday sets the tone for my trading video: 'Dow Soars Above 200-Day Average on NFPs, Will the #Fed Keep the Dollar Sliding' https://www.dailyfx.com/forex/video/daily_news_report/2020/06/06/Dow-Soars-Above-200-Day-Average-on-NFPs-Will-the-Fed-Keep-the-Dollar-Sliding.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/kquvec5HVc
  • Seasonal factors, oversupply issues and the outbreak of COVID-19 has seen the price of liquefied #naturalgas (LNG) fall to 22-year lows (1.519), with the situation exacerbated by ‘fuller-than-normal’ storage facilities. Get your market update here:https://t.co/VOqfkBQ4aR https://t.co/OsaphmqEmu
  • Are recent gains in the Indian Rupee and Nifty 50 warranted? Risks are brewing in the background, leaving USD/INR in a consolidative setting as the Nifty pressures resistance. Get your $USDINR market update from @ddubrovskyFX here:https://t.co/svDaSdprvN https://t.co/kgddX1ZHe4
  • I approve of this dry humor. https://t.co/b42GmIZDlL
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/59cdbPc4l7
  • The #Nikkei 225 trades at 4-month highs after a 50% surge from the March low, while the RSI registers its first overbought readings since November 2019. Get your market update from @DanielGMoss here: https://t.co/pOEt698Ooi https://t.co/EHD2EHmQLW
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/8gGfGuw87o
  • The $USD breakdown has taken the index into confluence support at the objective yearly open. Get your USD technical analysis from @MBForex here: https://t.co/A16XEv6n4d https://t.co/VFxFMFWJ5L
  • Texas virus cases increase 2.4%, above 7-day average of 2.3% - BBG
Gold Reaches Daily Resistance

Gold Reaches Daily Resistance

2014-04-29 19:00:00
Walker England, Forex Trading Instructor
Share:

Talking Points:

  • Gold is currently trading well off its 2014 highs
  • The 200 MVA creates resistance at $1,301
  • Trendlines can also be used with gold, to create an actionable trading plan

Gold (XAU/USD) prices have been confusing many traders for the 2014. Prices immediately broke out toward higher highs, and then promptly slid after putting the current yearly high in place at $1,387. As prices continue moving towards lower lows, traders can use points of resistance to develop an active trading plan.

Gold and the 200MVA

As we discussed in our previous daily trading lesson, moving averages are simple technical tools that can be designated to help determine the trend and support and resistance levels. For example a 200 period MVA can be used as a filter to determine if prices are trending higher or lower. If prices are above the average, the MVA works as support and traders will assume the trend is upward. Conversely, if price is below the MVA, this value will work as resistance and traders will look for new sell based positions.

Adding a 200 period MVA to gold exposes the underlying weakness for the commodity. Traders looking to take advantage of this indicator can see that resistance resides firmly overhead at $1,301.

Gold Reaches Daily Resistance

Trading with a Trendline

Now that we have a directional bias and a level of resistance identified on gold, we can use this in conjuncture with other techniques to develop a trading plan. Below you will see a series of trendline added to our gold chart. First we have a descending trendline creating another barrier of resistance. This line has been created by connecting three previous highs on the metal. When added to our 200MVA we can see a strong confluence of resistance above 1,301.

Trend traders will look for opportunities to sell gold as long as price stays under both values of resistance. Due to the definition of a trend, gold must create a series of lower lows in order for the current downtrend to continue. This will allow traders to first target the next value of horizontal support near 1, 2750. This value could also be added to our resistance line and create a descending triangle. In the event of a price breakout, this pattern suggests prices could move as low as $1,165.

Gold Reaches Daily Resistance

Managing Risk with Resistance

As with any trading strategy, whether you are trading breakouts, ranges, or trends there is risk! One of the benefits of identifying resistance is that there is a clear price level to manage risk. In the event that price moves over resistance any positions selling gold should be exited.

Now that you are more familiar with the key price levels on gold, you can practice trading the yellow metal on a demo account. You can get started following gold prices and your favorite currency pairs such as the EURUSD with a Free Forex Demo with FXCM. This way you can develop your trading skills while tracking the market in real time!

Gold Reaches Daily Resistance

---Written by Walker England, Trading Instructor

To contact Walker, email instructor@dailyfx.com. Follow me on Twitter at @WEnglandFX.

To be added to Walker’s e-mail distribution list,CLICK HEREand enter in your email information

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.