Weekly Trend Intact Above 2,228 Support
If a deeper retracement does come then last week’s low of 2,228 is going to be a key price level to watch for support, or higher. It is part of the price structure of the weekly trend. On the daily chart you can see how the 8-Day MA was tested as support last week and price was quickly rejected to the upside thereby confirming strong support.
Therefore, it could be an area of support again or mark a clean pivot towards lower price levels. Below the 8-Day line lies the 38.2% Fibonacci retracement at 2,282 and the 50% retracement at 2,256. The near-term uptrend line is also associated with those price areas but that depends on when the line is reached.
20-Day MA at 2,230 Key Support
A more significant price zone is represented by the 20-Day MA, now at 2,230. It helps determine the quality of the near-term trend. If gold stays above that line, strong upward momentum as seen recently may return. It usually is a more reliable line to gauge the market than the trendline. Gold remains in a near-term bullish posture if it stays above the 20-Day MA. Of course, this is relative to one’s time frame that is being used to engage the market.
Further Weakness Sets Up Bearish Weekly
Currently, the weekly chart shows weakness if it closed today. A bearish candle in the weekly chart would further point to a likely pullback before higher prices. In other words, where gold closes within the week’s trading range should provide clues as to whether it pulls back or continues to strengthen heading into next week.
It is important to note that technical analysis is a valuable tool in predicting potential price movements. By analyzing key support levels such as the 20-Day MA and previous lows, traders can better assess the strength of the market trend. Additionally, observing candlestick patterns on weekly charts can provide valuable insights into the sentiment of market participants, helping traders make informed decisions.
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