21.05.201413:10 Forex Analysis & Reviews: GOLD analysis for May 21, 2014

Overview:

Since our last analysis, gold has been trading upwards, as we expected, the price rejected from our Fibonacci retracement 61.8% at the price of 1,290.00 on very high volume. As you can see in the chart, our Fibonacci retracement 61.8% at 1,290.00 held successfully again, which is sign that selling at this stage looks very risky. According to the Daily timeframe, we can observe strong bullish reactions in the background from our support 1,277.00 on higher volume, which is a sign that short-term selling looks very risky. According to the 1h timeframe, there is an strong demand overcoming supply on high volume, which is another sign for potential bullish movement. We can conclude that the price of 1,305.00 (swing low) is strong resistance and just if the price breaks that level on hgiher volume we may see further bullish continuation. Be careful with selling since we got second rejection from our Fibonacci zone.

Daily pivot Fibonacci points:

Resistance levels:

R1: 1,296.83

R2: 1,299.41

R3: 1,303.57

Support levels:

S1: 1,288.51

S2: 1,285.93

S3: 1,281.77

Trading recommendation: Trading the metal, be careful with short-term selling since price is near strong support zone