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A Complete Analysis On Gold!

XAU/USD

We had pin pointed the entry levels in our yesterday's news letter and also mentioned the opportunity to go short.

The spike on Gold was at 1269 and our recommended sell points were 1267, those traders who short the pair at 1267 are currently trading positive with 2000 pips and this was a good quarterly starter. The initial spike was right on dot on the upper triangular pattern and is currently pointing towards 1237.

A break of this triangle will open doors towards 1214 and 1195.

Looking closer on the daily chart we can also identify the Head and Shoulder pattern and this was also mentioned yesterday. The added findings in this chart shows us that the immediate support is at 1238 where the 50 DMA intersects with the support level pointed out in the previous chart.

Yesterday's candle closed with a long wick however, the closure was not of a bearish tone. This leads many to believe that Gold may not have a bearish leg but will range between 1270 and 1214. This analysis is not wrong, but what is ignored is the monthly chart which we will be looking in the following pages.

We are more interested to see the current day closure, and if the current candle has a bearish close then this will support our entry into the 1100's A daily doji will add enough momentum to break the 50 DMA, else our interim target will be shifted towards 1238.

The sell entry was also based on the ascending channel on the 4 hour chart. Yesterday's recommendation included the observation of the 4 hour chart to identify sell entries, and those traders who used this chart would have gotten a right sell point near the highs of the ascending channel, and was hand in hand with the daily resistance.

Based on the channel our support levels are placed at 1242, 1238, 1236, 1227, 1223, 1217, 1214 and 1210. We can break our orders and liquidate smaller portions when the price reaches these support areas.

The only contradicting cart in the entire frame is the weekly chart as it continues to trade above the channel drawn from April 2013. Price broke above this channel in the month of Feb and is holding above the channel forming a minor ascending channel that parts from the upper line. We can use this chart as a brake to our current acceleration and if we see any change in direction then we should immediately apply our brakes. But if the candles on the weekly chart starts to point south, then we can accelerate our trades by building more sell orders to it.

Gold has been forming higher highs for the last 4 weeks now, despite a bearish candle being formed on the weekly chart, yet the pair continued to show it self as a bull for the week. We must remain guarded on our existing trades and must protect it with at least minimum profits rather than losses. A profit booking is recommended for the existing trades.

Turning towards the monthly chart, we are following the last months bearish doji and our entire analysis on the lower time frames are based on this chart.

The current months candle is trading higher than the open but we still have 8 more days to conclude the style. The level 1252 continues to grow stronger as the price is unable to break above this level in the monthly chart for three consecutive months. This is our hope and we are looking for a shift towards 1199 and 1133 this quarter.

It all depends on the current months candle close.

For more daily Forex signals, visit NoaFX Knowledge Center.