Kicking this morning’s report off with a look at the weekly timeframe, the technical picture has the yellow metal nursing losses off support coming in at 1452.9, closely shadowed by another layer of support at 1417.8. This follows a breach of support at 1536.9, which could represent resistance going forward.
A closer reading of price action on the daily timeframe has bullion shaking hands with its 200-day SMA (orange – 1499.0) and paring losses off Quasimodo support from 1459.2, sited just north of the current weekly support level. Note should we dethrone the daily Quasimodo support today, weekly support highlighted above at 1417.8 is likely to make an entrance.
Resistance at 1518.0 is seen in motion on the H4 timeframe after registering 4-month lows and testing the daily Quasimodo support mentioned above at 1459.2 Monday. A move higher today could result in testing H4 resistances at 1548.9 and 1540.0. With respect to the relative strength index (RSI), we’re now trading within overbought terrain, but seen attempting to regroup off lows at 19.00.
Technically speaking we have some heavy-weight support in this market at the moment: a weekly support at 1452.9, a daily Quasimodo support at 1459.2 and the 200-day SMA. Therefore, a break north of H4 resistance at 1518.0 may be on the cards, though upside north of here appears limited given 1536.9 having the potential to act as resistance on the weekly timeframe. Not to mention the H4 resistances located at 1548.9 and 1540.0, followed by daily resistance at 1550.3. That’s a lot of wood to chop through.
Although the primary trend remains facing a northerly trajectory, there’s equal opportunity for longs/shorts in this market right now.
Disclaimer: The information contained in this material is intended for general advice only.