FX.co ★ GOLD analysis for April 21, 2014

Overview:

Since our last analysis, gold has been trading downwards, as we expected, the price tested the level of 1,281.75 on volume above the average. If we take a look at 4H timeframe, we can observe supply bar on volume above the average and that is a good sign for potential downward movement. Price is testing previous swing low (1,286.00). According to the short-term prospective, gold is in progress of bearish corrective phase and I've placed Fibonacci retracement to find the first down station. Our Fibonacci retracement 38.2% at the price of 1,303.00 held successfully and that caused price to start bearish movement. If the price breaks the level of 1,279.00 on a higher volume, we may see it testing the level of 1,263.00. My advice is to watch for selling opportunities after retracement.

Daily pivot Fibonacci points:

Resistance levels:

R1: 1,294.40

R2: 1,297.20

R3: 1,299.00

Support levels:

S1: 1,289.80

S2: 1,288.00

S3: 1,285.20

Trading recommendation: Trading the metal, be careful with short-term buying at this stage since gold is in progress of major bearish corrective phase. Watch for selling opportunities after retracement.