Talking Points:
- Traders Wait for Gold Prices Next Breakout
- Daily Resistance is Found at $1,292.50; Support $1,279.03
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After trading to new 2017 highs at $1,295.62 earlier in the week, gold prices are now consolidating. This sideways price action, allows traders time to plan for the markets next breakout. Technically traders should note that gold prices are forming an inside bar, as seen below on the daily chart.With prices failing to breakout to a new high or low in early trading, traders may elect to use Wednesday’s daily bar as a reference for values of support and resistance.
Wednesday’s high is found at $1,292.50, and currently acting as a point of resistance. Traders may look for bullish daily breakouts above this value. Alternatively Wednesday’s low is found at $1,279.03, which is currently acting as a value of support. A bearish breakout below this value would suggest a continuation in downward momentum, opening up gold prices to test other values of technical support.
Gold Price, Daily Chart Inside Bar
Intraday, gold prices continue to range after testing support at today’s S1 pivot at a price of $1,281.22. If prices continue to rebound here, gold traders should look for the commodity to next pass through today’s central pivot found at 1,286.86. A move to today’s central pivot would suggest a change in momentum for gold in the short term. This would open gold prices to rally towards points of resistance including today’s R1 and R2 pivots found at $1,294.69 and $1,300.33. It should be noted that a move to either of these values would place gold back above yesterday’s daily high, suggesting a broader breakout may be occurring.
In the event that gold prices fall further intraday, traders may find the next values of support at today’s S2 and S3 pivots. These pivots are located at $1,273.39 and $1,267.75 respectively. A move to either of these points would also place the price of gold outside of yesterday’s daily range. In this bearish scenario, traders may look for the commodity to test longer term values of price support. This includes the April 11th swing low, which is found at $1,253.17.
Gold Price, Daily Chart Inside Bar
— Written by Walker, Analyst for DailyFX.com
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