It could be important to see 4h and/or Daily closing prices to remain above 1677 support level, which could be treated as the confirmation of the buy signal. Although Gold might start rising without any warning even from the current level.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
Click below to open a Free Demo Account with our trusted brokers:
Trade Idea Details:
Key support levels:1682, 1654
Key resistance levels:1697, 1755
On the 4-hour chart, we have applied the Fibonacci retracement indicator to the corrective wave down after breaking the 200 Exponential Moving Average. It shows two key levels, one being the 161.8% support at 1681 and another being the 261.8% resistance at 1755. On the Daily chart, we can clearly see that the 1682 support has been rejected multiple times, including today. The strongest spike below has reached the 1658 level, which could be used by the buyers to place the stop loss.
Overall, the long term trend remains bullish and while the support holds, it would be reasonable to expect the uptrend continuation, or at the very least yet another wave to the upside towards 1755 resistance.
Just on Friday, June 5, Gold has rejected the average price uptrend trendline, although today it rejected the average price downtrend trendline while reaching 1697. This might lead to yet another small downside move, potentially just below the most recent low at 1677. All-in-all, the buying opportunity is open, but lower entry would mean a better risk to reward ratio.
Potential Trade Idea:
Best buying opportunity could be presented while the price is between 1682 and 1677. The stop loss could be placed near the lowest spike produced below the 161.8% Fibs support, potentially at 1654. In regards to the target, there is only one key resistance and it is 261.8% Fibs at 1755.