Gold Buyers Back in the Fight; H1 Supports Call for Attention
Control changed hands in the gold space (XAU/USD) last week; buyers strengthened their grip, adding +2.5% and snapping a two-week losing streak a whisker off all-time highs of $2,431.
Technicals Favouring Buyers
Last week’s move was (technically) aided by support on the daily timeframe coming in from $2,280, a level which the Research Team were watching closely and recently noted the following (italics):
A move lower will unlikely breach bids from daily support at $2,280, which is an area buyers could look to defend as dip buyers (trend followers) attempt to enter the trend from support.
The above-mentioned support benefitted from a 1.618% Fibonacci projection ratio at $2,293. Among the Harmonic trading community, this is also referred to as an ‘alternate’ or ‘extended’ AB=CD formation. You will note that price has rallied beyond the 38.2% Fibonacci retracement ratio at $2,336, ending the week at $2,371, a 61.8% Fibonacci retracement ratio. Both of the aforesaid ratios are derived from the legs A-D of the AB=CD structure and tend to serve as upside targets for Harmonic traders.
Having seen the AB=CD structure complete (both upside targets achieved) and taking into consideration that the price of the yellow metal remains entrenched within an unmistakable uptrend (no matter which trend identification tool you employ, it all points to the same thing), together with the daily chart’s Relative Strength Index (RSI) rebounding from a combination of the 50.00 centreline and trendline support (extended from the low of 19.33), this remains a buyers’ market. The caveat is the weekly chart’s RSI recently pulling back from overbought highs not seen since mid-2020, though let’s not forget that this indicator can, and often does, remain overbought for prolonged periods in trending environments.
Direction This Week?
Given the bigger picture demonstrating scope to explore higher terrain, shorter-term structure on the H1 timeframe highlights neighbouring demand at $2,347-$2,355 as a possible platform buyers may work with this week. Failure to hold here unearths two additional levels of support to consider at $2,326 and $2,344.
Technicals Favouring Buyers
Last week’s move was (technically) aided by support on the daily timeframe coming in from $2,280, a level which the Research Team were watching closely and recently noted the following (italics):
A move lower will unlikely breach bids from daily support at $2,280, which is an area buyers could look to defend as dip buyers (trend followers) attempt to enter the trend from support.
The above-mentioned support benefitted from a 1.618% Fibonacci projection ratio at $2,293. Among the Harmonic trading community, this is also referred to as an ‘alternate’ or ‘extended’ AB=CD formation. You will note that price has rallied beyond the 38.2% Fibonacci retracement ratio at $2,336, ending the week at $2,371, a 61.8% Fibonacci retracement ratio. Both of the aforesaid ratios are derived from the legs A-D of the AB=CD structure and tend to serve as upside targets for Harmonic traders.
Having seen the AB=CD structure complete (both upside targets achieved) and taking into consideration that the price of the yellow metal remains entrenched within an unmistakable uptrend (no matter which trend identification tool you employ, it all points to the same thing), together with the daily chart’s Relative Strength Index (RSI) rebounding from a combination of the 50.00 centreline and trendline support (extended from the low of 19.33), this remains a buyers’ market. The caveat is the weekly chart’s RSI recently pulling back from overbought highs not seen since mid-2020, though let’s not forget that this indicator can, and often does, remain overbought for prolonged periods in trending environments.
Direction This Week?
Given the bigger picture demonstrating scope to explore higher terrain, shorter-term structure on the H1 timeframe highlights neighbouring demand at $2,347-$2,355 as a possible platform buyers may work with this week. Failure to hold here unearths two additional levels of support to consider at $2,326 and $2,344.
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