Gold: Minor Correction Approaches 1229.0
Munther Marji | Sep 23, 2014 07:25AM ET
Just as expected, Gold has used the fact that the first key resistance level is a bit far to create an expected minor correction. This correction has approached the very important 1229.0 (which is also expected), reaching 1227.0 so far.
We are very close to a test of 1229.0, and I hope we do test this level, because the outcome of such a test would provide us with valuable information about the direction of the next sizable move. This level combines the falling trend line from August 28th top with the short term Fibonacci 61.8% which indicates just how important it is. Only with a break above this level that the precious metal will be expected to escape this spiral downtrend! However, since the first key resistance is this far, this gives the precious metal a chance to take a breath after the recent losses, without breaking the downtrend. Above 1229.0 we would still need a confirmation in the form of breaking above 1232.3, and if we get our confirmation we would be on the way to the first target of this break, not surprisingly 1241.9.
On the support side, this rising move from Monday’s low has left behind it a few important resistance levels which we should care about. The first of those levels is the least important: the micro term Fibonacci 38.2% retracement level at 1219.8. The second is probably the most important because it combines the rising trend lien from that low, with the Fibonacci 50% for this move. This level at 1217.6 is probably the one that would confirm topping around 1229.0, meaning that if we top close to 1229.0 then drop back below 1217.6, that would confirm an important top at whatever daily high we have today (as long as it is reasonable close to 1229.0), and that we are heading to levels below $1200!
Other important levels in this area include 1215.4 & 1213.6. Below here, we have Monday’s low at 1208.2, followed by the lowest price seen this year 1204.9. Below here a test/break below the $1200 landmark is expected, which will be expected to break below the double bottom seen in June & December of last year around 1180.4.
Attached Chart(s):
Support:
• 1219.8: micro term Fibonacci 38.2%, calculated for the rising move from Monday’s 8-month low 1208.2 to today’s current daily high 1227.0.
• 1217.6: an important level which combines the rising trend line from Monday’s low, with micro term Fibonacci 50%, calculated for the rising move from Monday’s 8-month low 1208.2 to today’s current daily high 1227.0.
• 1215.4: micro term Fibonacci 61.8%, calculated for the rising move from Monday’s 8-month low 1208.2 to today’s current daily high 1227.0.
• 1213.6: micro term Marji 71.4%, calculated for the rising move from Monday’s 8-month low 1208.2 to today’s current daily high 1227.0.
• 1208.2: today’s 9-month low.
• 1207.7: July 4th 2013 daily low.
• 1200.0: psychological level & landmark.
• 1192.4: December 22nd 2013 daily low.
• 1186.9: December 18th 2013 daily low.
• 1192.4: December 22nd 2013 daily low.
• 1180.4/1182.3: a small area which combines June 2013 35-month low & major bottom, and December 2013 6-month low.
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Resistance:
• 1229.0: an important resistance combining the falling trend line from August 28th top, with the short term Fibonacci 61.8% retracement level, calculated for the falling move from September 16th high 1241.9 to Monday’s 9-month low 1208.2.
• 1232.3: short term Marji 71.4% retracement level, calculated for the falling move from September 16th high 1241.9 to Monday’s 9-month low 1208.2.
• 1241.9: an important resistance which combines September 16th high with the medium term Fibonacci 38.2% retracement level, calculated for the falling move from August 28th high & Fibonacci top 1296.5 to Monday’s 9-month low 1208.2 (both levels are exactly the same down to the pip).
• 1247.2: September 8th daily low.
• 1252.4: medium term Fibonacci 50% retracement level, calculated for the falling move from August 28th high & Fibonacci top 1296.5 to Monday’s 9-month low 1208.2.
• 1258.4: June 16th daily low.
• 1262.8: medium term Fibonacci 61.8% retracement level, calculated for the falling move from August 28th high & Fibonacci top 1296.5 to Monday’s 9-month low 1208.2.
Trend:
• Short term: Down, as long as the price is below 1232.3.
• Medium term: Down, as long as the price is below 1271.2.
• Long term: Down, as long as the price is below 1627.6.
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