1295-1302.” Price reversed sharply off this threshold this week. Initial weekly resistance remains steady at, “the 2016 high-day close at 1366. Critical resistance remains up at 1380/92 where the 2014 high and 38.2% retracement converge on the median-line of the 2013 broader pitchfork formation (blue).”
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The daily chart highlights a pair of parallels (red) continuing to govern price action since the yearly high with gold rebounding sharply off confluence support at the lower parallel this week. Initial daily resistance stands at median-line / 38.2% retracement at 1325 backed by 1339. Ultimately a breach above the 2016 high-day close at 1355 would be needed to mark resumption of the broader uptrend.
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Gold 240min Price Chart
A closer look at gold sees prices rebounding off the median-line of this descending pitchfork formation we’ve been tracking since last week. A breach above resistance here looks for a stretch into the upper parallel / 50% retracement at 1332- a close above this level would be needed to suggest a near-term low is in place with such a scenario targeting a rally back towards 1339 and the 2017 high-day close at 1346.
Bottom line: Look to fade weakness early next week while above 1300 with a topside breach of this multi-week formation needed to fuel the next leg higher in Gold. A break below this support barrier would invalidate the reversal play and keep the focus lower towards subsequent support objectives at 1295 and the 61.8% retracement at 1286.
—Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.