Gold Continues to Move Down and Closer to Major Support
Hello Traders!
Friday's price action was very favorable for our existing short position and price moved off the long standing support trendline (magenta line) and further away from the BB midline. If you remember what I said earlier last week, the downward cycle as shown by the Stoch RSI still needed more time to complete and I thought that presented another few days of downward price action. As the Stoch RSI has not yet completed it's cycle down, I think that Gold will continue to be under setting pressure for another few days.
I will say that this is in no way a done deal as price is moving into an area filled with multiple levels of strong support. The first is the dotted magenta line which is the bottom of this wedge pattern. Notice how it is right at the same level as the second BB which is the 1.5 Std. Dev.
You also have the bottom of this very old channel that has been in place since July 1. That's the cyan line. And then of course is the lower BB, the 2.0 Std. Dev. @ 1306.6. Finally, there is this long support line @ 1305 which I have drawn in dotted green. You can scroll back in time and see that this has been a critical area of support and resistance dating back to March 2014, and more recently has acted as support 3 times since July. Can it hold up a fourth time? It might but also remember that today's support is tomorrow's resistance! Eventually, all S&R levels do break down. I am not saying this level won't hold, one way or another. Instead, let's see how the price action unfolds if, and when, price gets to that level.
Until then, safe trading and protect your profits!
Friday's price action was very favorable for our existing short position and price moved off the long standing support trendline (magenta line) and further away from the BB midline. If you remember what I said earlier last week, the downward cycle as shown by the Stoch RSI still needed more time to complete and I thought that presented another few days of downward price action. As the Stoch RSI has not yet completed it's cycle down, I think that Gold will continue to be under setting pressure for another few days.
I will say that this is in no way a done deal as price is moving into an area filled with multiple levels of strong support. The first is the dotted magenta line which is the bottom of this wedge pattern. Notice how it is right at the same level as the second BB which is the 1.5 Std. Dev.
You also have the bottom of this very old channel that has been in place since July 1. That's the cyan line. And then of course is the lower BB, the 2.0 Std. Dev. @ 1306.6. Finally, there is this long support line @ 1305 which I have drawn in dotted green. You can scroll back in time and see that this has been a critical area of support and resistance dating back to March 2014, and more recently has acted as support 3 times since July. Can it hold up a fourth time? It might but also remember that today's support is tomorrow's resistance! Eventually, all S&R levels do break down. I am not saying this level won't hold, one way or another. Instead, let's see how the price action unfolds if, and when, price gets to that level.
Until then, safe trading and protect your profits!
