Bullion, a market that usually rallies in times of market panic, fell sharply Thursday, shedding more than 3.50%.
For traders who read Thursday’s technical briefing you may recall the following piece:
Weekly support failing to offer much of a ‘floor’ at 1667.3 (now serving resistance), as well as daily price navigating lower ground beneath resistance at 1687.4, may see further losses below 1649.9 (38.2% Fibonacci support) materialise on the H4 scale. A retest at 1649.9 will likely encourage sellers, particularly if the retest forms by way of a H4 bearish candlestick signal.
As per the black arrows on the H4 chart, price action retested 1649.9 and formed a shooting star candlestick pattern, considered a bearish signal at peaks. Well done to any readers who managed to take advantage of yesterday’s movement.
H4 structure shows March and February’s opening levels at 1591.7 and 1593.0 were taken out, leading to the unit rolling towards trend line resistance-turned support, taken from the high 1611.3, and hauling the RSI deep into oversold terrain. A push lower from here has daily support at 1550.3 to target. While over on the weekly timeframe, we can see trend line support, taken from the low 1269.6, next on tap, followed by support at 1536.9.
Between 1536.9, the weekly support level, and 1550.3, the daily support base, traders likely expect a recovery attempt to occur, marked in green on the H4 timeframe. A move out of this zone could be sizeable, with the possibility of at least reaching March/February’s opening levels around 1590.0ish.
Disclaimer: The information contained in this material is intended for general advice only.