FX.co ★ Gold: analysis for May 26, 2015

Overview:

Gold has been trading downwards. As we had expected, the price tested the level of $1,193.00. The short-term trend is beairsh. The price broke the strong support cluster at $1,201.00 and we may expect further bearish direction. We can observe a sign of weakness (SOW) after a breakout of trading range, which signals that buying looks risky. I have placed Fibonacci retracement to find potential support. I got Fibonacci retracement 61.8% at the level of $1,192.00 (on the test). If the price breaks the level of $1,192.00 in a high volume, we may see the level of $1,178.00 (demand zone) on test.

Daily Fibonacci pivot points:

Resistance levels:

R1: 1,208.70

R2: 1,210.00

R3: 1,212.25

Support levels:

S1: 1,204.00

S2: 1,203.00

S3: 1,200.00

Trading recommendations: Be careful when buying gold below the price of $1,225.00 and watch for selling opportunities after retracement.