Gold To Resume Lower?
Dailyfx | Apr 10, 2014 01:10PM ET
- Cyclical turning point this week
- Weakness in metal after Friday would confirm top
The price action in Gold leading into this week’s turn window has been less than ideal. Given the strong downtrend trend in place since mid-March we were initially looking for a low to develop. The metal, however, found support early last week from just under the 50% retracement of the December/March advance at 1285. The recovery that has followed has not been very impressive retracing only just over 38% of the decline from 1292. In terms of time though it is long enough to qualify as a “trend” and any weakness that develops over the next few days would confirm a minor cyclical top is in place in the metal and set the stage for a possible resumption of the medium-term downtrend. Only a move back through this week’s high (next week) would invalidate and re-focus higher.
Charts Created using Marketscope – Prepared by Kristian Kerr
LEVELS TO WATCH
- Resistance: 1324 (WTD high), 1335 (Fibonacci)
- Support: 1296.95 (Tuesday’s low), 1277 (MTD low)
Strategy: Sell Gold on weakness
- Entry: Sell XAU/USD on a 1300 stop
- Stop: 1-day close above 1335
- Target: 1230
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--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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