Price of Gold strong resistance at or before US$936

In my last article, I suggested that support would surface around 880, as I expected the down move that occurred. The market itself has declared I found support, short term, at 891. instead of 880.

Most likely the upward bounce from this level will run into strong resistance at or before 936, after which a further decline should be anticipated.

From one point of view the larger chart pattern appears to be an unconfirmed classic ‘Head and Shoulders’ formation. It will only be confirmed and tradable as a Head and Shoulders pattern if and when the price of gold drops convincingly below the rising trend line. For that, we must wait and see. (not all lines applicable to a head and shoulders are drawn).



TECHNICALS

Stochastic – oversold
MACD – moving into bearish territory
MACD Histogram – diverging with price, suggesting upward pressure is present in the market.
R1 - immediate resistance between 936-945.
R2 – resistance zone between 980 – 1006.
S1 – support between 891.50 – 874.
S2 – distant support at 800.

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.