Trend Day Down For Gold-Macro Support In View

Posted Tuesday, February 20, 2018 by
Shain Vernier • 1 min read

Gold is in the midst of a pronounced intraday downtrend. After the compressed trading range of President’s Day, price has broken hard to the bear. April gold futures are trending beneath several support levels and are threatening to extend losses.

It feels as if we are at the turning point of several markets. The USD is rallying, U.S. indices are rebounding, and gold is selling off. Let’s take a look at bullion’s technical roadmap and attempt to determine where this market is heading.

Gold Technicals

April gold futures are down over 175 ticks and pushing intraday lows as of press time. The bears have taken complete control, running price beneath the Daily SMA, 20 Day EMA, and Bollinger MP.

April Gold Futures (GC), Daily Chart

Back on February 6, a considerable correction and induced further selling. Today’s action appears very similar as price has broken below immediate support on the daily timeframe. In the event that this trend continues, previously valid support levels will come into play.

Here are two levels to watch as we move deeper into the trading week:

  • Support(1): 38% Macro Retracement, 1321.7
  • Support(2): 50% Macro Retracement, 1306.6

Bottom Line: In the event that this market slumps further, buy orders at 1322.1 are a good way to play a bounce of off macro Fibonacci support. This level has been effective in the past and positive price action from this area is probable. Using an initial stop at 1319.9, 22 ticks are available when implementing a 1:1 R/R management plan.

As always, keep a firm grasp on risk and trade for tomorrow!

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