The gold daily chart has now a reversal candle. Could it be that gold is ready to retrace some of the down move we’ve seen this week and if so, where are the key levels that we should take into account when planning our trades? Let’s see what the price of gold tells us about the collective mind of all the market participants. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.
Let’s first briefly cover what we said yesterday. We said that the price of gold is trending lower in 4h timeframe and that there was a resistance area above (between 1862 and 1873). We said that we’d look for sell signals with targets at $1852 and $1827. Covering this background helps new readers understand today’s analysis better. Let’s now take a look at the current price action.
Yesterday’s daily candle is a reversal candle that indicates a change in the balance of power is taking place. Over the last few days, we had the red team pushing the price in their direction but now it’s the green team that is gaining the upper hand. They managed to stop the fall and forced the market higher from the low of 1848 yesterday. To take advantage of our analysis and ultra-low trading fees, register for an account and deposit here.
The next significant resistance level is at $1902 and based on current price action, we expect the price to move to or near this resistance. The price range of $1894 – $1910 is an area where the green team could run into trouble and start losing ground. If price rallies to this range we will be looking for signs of weakness.
With gold showing signs of strength we view it likely that the price will rally to the area highlighted with a green box. This allows us to look for buy signals above $1860 with our T1 at $1880 and T2 at $1892. Risks for this analysis include potential dollar strength which would demonstrate itself as gold’s inability to break resistance levels. If you’d like to get better at planning your trades and managing risks, you might want to join me to my next live webinar here. I will help you in planning how to execute your trades so that you never need to worry about blowing your account.
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Chief Market Analyst
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