Commodities Corner: Gold 180pip Bounce From Support Set Up

Below you will find the Technical & Trading Takeaway section of my report from the 16th of March, in which I highlighted the support set up in Gold which could provide the platform for a move to challenge the crucial 1300 level, price tested our 1210 support zone and has since bounced 180pips.

Technical & Trading Takeaway

gcwk

From a trading perspective I believe Gold is at an inflection point, we can see on the weekly scale chart above that the Gold advance stalled just ahead of  the weekly symmetry swing objective at 1296, to confirm a broader phase of correction on the weekly scale we really need to see a weekly close above 1300. We shall look at a daily price pattern that may set up the required 1300+ close.

goldd

Price action the daily scale looks like there is a symmetry swing support test at 1210 underway, if this level attracts buyers we should see a third push into a cycle high for this leg above 1300 as per the chart above, negation levels for this trade thesis would be a breach of 1190 support. The 1210 level not only benefits from the symmetry support but if we look to the left on the chart we can see decent market structure support at prior resistance creating confluent support for longs at this level.

If the 1210 support fails to encourage renewed upside then I anticipate a much deeper correction to develop which would see the secondary symmetry swing objective at 1140/30, this area would also present a potential inverse head an shoulders pattern, I have outlined this pattern on the chart below. If 1190 is eroded I will revisit this set up in future reports.

goldihs

For updates on trade of the day set ups and the other trades I am currently monitoring be sure to follow me on Twitter @LFXPatrick

Posted in Commodities Corner, Forex Analysis, tagged with on