- Gold bulls are back in the driving seat but may face fierce opposition in coming days.
- Bears will be seeking for the daily resistance zone to hold and provide the next shorting opportunity.
In the following series of analysis, we look at the price action of gold in a top-down illustration and derive where the next bearish opportunity could arise for swing traders.
Starting with the monthly chart, we can work our way into the daily chart and sketch out the market structure and bias.
Monthly chart
The monthly chart shows that there are prospects of a downside extension following a correction of the first significant bearish impulse.
The 61.8% Fibonacci retracement of the bullish impulse aligns with monthly resistance and liquidity which offers a high probability target area for the bears to focus on next.
Weekly chart
The weekly chart illustrates that the price has yet to complete a 38.2% Fibonacci retracement which meets prior support structure which would be expected to now act as a strong resistance zone.
Bears would be prudent in waiting to see that this area does indeed deny the bull's from taking back control.
Daily chart
The daily chart shows that the price is now through old support which did not do the job of keeping back the bulls.
It is now likely to act as support again on a restest, but first, we are waiting for a daily close above the structure for initial confirmation.
From here, the bulls can enjoy some time in the driving seat, but the overhead resistance will be a huge hurdle.
A rejection from the structure will likely put the bears back in the driving seat.
An opportunity could be derived from there to catch the next bearish impulse tat would target the said 61.8% Fibo' retracement of the monthly bullish impulse.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD turns negative near 1.0760
The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.
GBP/USD comes under pressure and challenges 1.2500
GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.
Gold retreats from highs on stronger Dollar, yields
XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.