This week observed bullion stage a sharp rally, set to potentially break to a new high for the year. Supported by the recent emergency rate cuts and global equities spinning lower, as well as the 10-year Treasury yield hitting a new all-time low in recent trade, we can see weekly price threatening a close above resistance at 1667.3, which if it comes to pass, may clear the path north and expose Quasimodo resistance at 1741.9.
Resistance on the daily timeframe at 1687.4 remains in play. A close above the said level adds conviction to a run higher, targeting a daily Quasimodo resistance plotted at 1718.8.
Shorter-term movement on the H4 timeframe, nonetheless, recently crossed swords with a deep 88.6% Fibonacci retracement ratio at 1675.9. Traders may also note Quasimodo resistance resides close by at 1681.0. A pullback from either H4 resistance could draw support at 1655.3 back into the frame, whereas sustained bidding may entice daily resistance into view, mentioned above at 1687.4. Interestingly, the relative strength index (RSI) trades at overbought levels.
A retreat from H4 structure at 1681.0/1675.9 is possible, with H4 support in wait at 1655.3. Traders considering fading the said resistances will likely wait for additional confirmation before committing, given the strength of the bulls right now.
Those interested in joining the current uptrend may find an entry north of daily resistance at 1687.4. At current price, H4 resistances may hinder upside.
Disclaimer: The information contained in this material is intended for general advice only.