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GOLD has started this week on the negative note, as it was seen trading lower during the Asian session. There was a strong support around the $1282 level, which was broken by the precious metal sellers. During this past week, GOLD traded higher, but the upside failed right around an important technical level i.e. the 50% Fibonacci retracement level of the last drop from the $1320 high to $1271 low. More importantly, the 100 moving average on the 4 hour timeframe also acted as a hurdle for GOLD buyers. There is an important economic release scheduled during the NY session in the US today. The US ISM manufacturing PMI will be released, which might impact the prices of GOLD in the near term.
There was an important bullish trend line on the hourly chart for GOLD, which was broken earlier during the start of the London session. This particular break might be very crucial, as it has opened the doors for further downside acceleration. GOLD is heading towards the last swing low of $1271, and is likely going to test the mentioned level in the coming session. It is around the stated level that GOLD buyers might appear. If the prices rise a bit from the current levels, then the broken trend line could act as a strong resistance for GOLD. So, the $1284 level might be considered as a selling zone in the near term.
On the downside, initial support can be seen around the last low of $1271, and a break below might call for a move towards the $1260 level. The 4H is also below the 50 mark, which is a bearish sign.
Overall, selling rallies could be preferred if GOLD continues to struggle around the $1284 level.
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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com
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