Gold At 50 Day SMA

Gold, Weekly

As USD has rallied higher over the last few days the price of Gold (in dollar terms) has moved lower. The high of the last week was above a resistance level at 1224.50 at a 50 week moving average. Now price is approaching a 50% Fibonacci retracement level at 1187. The 61.8% Fibonacci retracement at 1176.40 is relatively close to a weekly pivot low from April and coincides with daily Bollinger bands thus highlighting a level that has in the past turned price higher. However, before price can get that far there are support levels for bears to deal with. These support levels are visible at daily and 4h charts. In terms of higher time analysis Gold is in a sideways range with an upside bias as it has been able to make higher lows and (on a closing basis) a higher high. However, it seems to me that the resistance at 1224.50 to 1232 or so will need some work and real commitment from the bulls before it can be penetrated.


Gold Daily,

Price has broken below a support (now resistance) at 1200.80 and has fallen to (and slightly under) the 50 day SMA. This level is the closing high (highest close) of sideways move from the beginning of May. Stochastics are getting oversold and price is trading at a level that used to be a resistance. Nearest support and resistance levels are 1193.3 and 1200.80. The next important S&R levels after these are at 1177.90 and 1214.60.


Gold, 240 min

Trendline analysis in four chart reveals how Gold is trading at descending channel bottom that coincides with a range created by a 4h bar high (also a daily high) from May 12th and daily low from May 13th. Stochastics is overbought and the four hour bar could be creating a small pin bar indicating that price could reverse and move higher from here. Also, this price action takes place outside the lower Bollinger Bands adding to the oversold indication. Fibonacci levels coincide with potential resistance levels at 1202, 1207.8 and 1212.50. The region of 1207.80 coincides with the descending price channel and could act as a limit to potential upside moves.

Conclusion

Gold is in a sideways range with an upside bias as it has been able to make higher weekly lows and (on a closing basis) a higher high. However, it seems to me that the resistance at 1224.50 to 1232 or so will need some work and real commitment from the bulls before it can be penetrated. For short term traders Gold is at levels it could stage a small rally from. After correcting lower earlier today Gold has reached a level that has support in both daily and 4h time frames. With Stochastics oversold in both timeframes and market showing signs of downside momentum waning this level could cause the price of Gold to rally. Should there be appropriate long entry signals to justify buying at these levels, the Fibonacci levels in 4h chart could provide us with targets: T1 at 1202, T2 at 1207 and T3 at 1212. The region of 1207.80 coincides with the descending price channel and could act as an upper limit to potential upside moves.  Follow the intraday charts to decide whether price action confirms the idea.