Weekly closing price: 1332.4
Despite weekly price managing to chalk up a rather convincing close above weekly resistance at 1337.3 two weeks back, the yellow metal failed to generate much follow-through movement and ended last week back below 1337.3.
Further downside from current price could eventually see the unit tackle the 2018 yearly opening level at 1302.5.
Although weekly bears appear to have the upper hand at this time, daily structure reveals a potential obstacle in the form of a daily coming in at 1334.3-1323.3. This zone has already proved itself once already back on Jan 18, where daily price penciled in an inverted pin-bar formation and rallied higher. In the event that this base fails to hold, the next port of call below here can be found at 1308.4: a daily .
Friday’s hotter-than-expected US employment numbers prompted a dollar-bid market, which, as you can see, translated to an offered gold price. Leaving the H4 supply area at 1357.1-1352.2 unchallenged, bullion eventually plunged lower and crossed swords with a H4 161.8% Fib ext. point at 1327.3, from where price mildly pared losses into the close.
Potential trading zones:
Although 1327.3 is backed by another layer of H4 support just below it at 1325.9, and the aforementioned daily , buying this market is chancy for two reasons we believe:
1. Upward momentum on the weekly chart is clearly showing signs of topping after a series of weekly gains.
2. The close back below the current weekly resistance exhibits intention. Granted, the close may only be marginal, but the weekly itself is a near-full-bodied formation, meaning there is possibly some strength behind the move!
Selling, according to our technicals, should only be considered following a break of the aforementioned daily . However, you would have to pin down a rather tight entry since oncoming daily support, as mentioned above, is seen at 1308.4.