Namaste to all Hive, Indiaunited and Leo Finance community members🙏
Once again welcome all of you to my blog, where every Sunday we try to understand the movement of GOLD price for the next few days, that too purely based on technical analysis. And by the grace of lord shri krishna, every time till now our analysis has proved to be correct.🙏
click here to go through our last week's analysis.
Image by xb100 on Freepik | Edited on canva
Last Sunday we decided that we would look for opportunities to sell from Friday's closing (1913.69) to psychological support (1900.00), which was a move of more than 1300 pips and in the last few days we have moved very smoothly towards our target and beyond.
Also, we talk about an important support zone, breaking on either side of which there was a possibility of a unilateral move in the price.
Let us now take another dive into the Gold Chart and see where it could be headed in the coming week.
Image by tradingview
In the above 1 Day time frame chart of GOLD our discussed important support area is highlighted by yellow rectangle. Also you can see in this image a small white rectangle inside which 3 candles back to back closed outside our support zone, which shows the strength of the sellers.
Now by looking at this picture we can say that the weakness in the GOLD price has extended.
But because we have to trade as safe as possible, it is necessary to wait for the confirmation of this breakout here before doing any kind of trading.
Image by tradingview
In the above image you can see at the chart of 4 hour time frame.
The candle in the circled area you see in the above image was an attempt of price to move upward. But reaching a certain level (roughly 1903.50), the buyers lost control and the sellers started dominating. which resulted as a long rejection wick and a new low at roughly 1885 next day.
After which on Friday we saw a small candle on the daily 1D chart which is known as Inside Bar. Now, this sustained decline is followed by the appearance of an inside bar, that too at a key level, indicating that there has been a pause in the recent sell-dominated price action. After which 1885 should be seen as a new important support.
Which means that if the gold price has to go further down then it will be necessary to have a follow up movement below 1885.
And if that happens then the next supports could be 1881, 1876, 1870, 1866.50 and 1859.
Image by tradingview
But since on Friday we saw an inside bar candle on the daily 1D time frame chart which you can see circled in the above image. It is possible that from here the buyers will try to move the price up again.
And if that happens then 1894, 1897, 1900, 1903.50, 1911, 1916 and 1920 can act as resistance to the upside.
I personally would prefer to wait for the Price to break this inside bar to either side, and whichever direction I get the confirmation, I will trade that direction accordingly. However, I'm still more convinced for selling.
Thank you for reading this blog.