FX.co ★ Gold analysis for August 06, 2014

Overview:

Since our last analysis, gold has been trading upwards. As we expected, the price tested the level of 1,293.80 in a volume below average according to the 4H timeframe. As you can see from the chart, our Fibonacci retracement 61.8% completed successfully, so selling at this stage looks risky. I have placed Fibonacci expansion to find potential resistance levels and I got Fibonacci expansion 61.8% at the price of 1,291.70 (currently on the test), Fibonacci expansion 100% at the price of 1,298.90 and Fibonacci expansion 161.8% at the price of 1,309.00. Anyway, if the price breaks the level of 1,281.00 (our Fibonacci retracement 61.8%), we may see more downward movement. Be careful with selling Gold at this stage.

Daily pivot Fibonacci points:

Resistance levels:

R1: 1,292.34

R2: 1,295.10

R3: 1,299.57

Support levels:

S1: 1,283.40

S2: 1,280.64

S3: 1,276.17

Trading recommendations: Be careful with selling Gold at this stage since we got successful bounce from Fibonacci retracement 61.8%.