Namaste to all #hive and #inleo community members. 🙏
Earlier, we did the technical analysis of gold about 2 weeks ago, after which there has not been much change in the price of gold. But at the same time, there is no sign of any weakness in its price. If seen in the monthly time frame, the candle of October month looks like a bullish engulfing which signifies strength. But after moving almost 11% from its low in the last month, is it technically a good buy at these levels?
Let's find out.
Click here to go through my previous analysis.
Important points we talked about in our previous analysis are:
- A price movement as strong as the last 2 weeks was seen 7 months ago. So, this is undoubtedly a strong movement.
- But caution is necessary here because even a healthy trend needs to be followed with some profit booking to remain healthy.
- I would not think of selling it as long as the price remains above 1955 and 1945. Because recently while moving in a higher-high trend gold price has spent time near these levels.
After my analysis, in the last 2 weeks of price action, we saw that gold prices once touched our first support level of 1955 and again we saw a small uptrend in it due to strong buying.
But there is a lot to learn from this price action, let's try to understand.
I have tried to mark every necessary action.
- Point number 1 is where the gold price saw a slight resistance for the first time after a move of about 11% which you can understand by looking at the rejection wick.
- Point number 2 is where the gold price found support after a slight decline. This is the exact same support level we discussed in our previous analysis. Also here you can see a hammer candlestick which also signifies reversal.
- Point number 3 represents the same reversal that was indicated by the hammer candle formed in point number 2. and you can see a small higher-high trend here.
- Technically point number 4 should be considered as the breakout of the previous swing high. But the absence of any follow-up movement after the breakout candle tells how unsure the bulls are.
- In point number 5 you can see how sellers are dominating the buyers. This means that the buyers failed to push the price higher but the sellers showed their dominance with a big red candle.
- And finally, in point number 6 you can see another attempt by the buyers to push the price higher.
Let's now take another dive into the #XAU / #USD (GOLD) chart, and see where it could be headed in the coming days.
I hope you understand well all the levels, and price action explained above.
First of all, you have to mark the high of recent price action, which is roughly at the level of 2010. This would be our first important resistance. And learning from the recent price action, it would be better to wait for the follow-up movement instead of taking trades on breakouts.
Immediate important support would be the level of 1975 and 1955. So I would say it would be wise to trade with more caution in the area between 1955 to 2010
However, I have noticed that gold prices fluctuate more than other assets So trade as per your risk appetite and only after confirmation of follow-up movement.
My English is not very good so sometimes I use 'Google Translate'. Please don't think that anything I have written in this blog has been copied from somewhere or is AI-generated.