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Thursday, September 22, 2011

Gold Price at Major Support!

At the close of today's trading session I did my usual routine checks of the major market instruments and this Gold chart made me smile just a little bit. Gold/XAU/USD forex pair has been in a very clear sideways range since about August. Today price reaches a very significant support zone at $1720. On the chart bellow, I have marked two instances during the month of August where price respected the $1720 area very clearly. So we have a nice location, but not much else. Yes we have a rejection bar with a tail on it, but for my personal taste it leaves much to be desired. I would like to see much larger rejection bar, something that signifies a "stop hunt" and a show of force by the bulls. Today we saw a very muted response to that major support. My forex signal is to sit on the sideline for now and wait for a much more convincing scenario. I think the $1700 level will be a major battle zone level and a much better area to look for a continuation of the long term trend.

If that 4-hour bar breaks to the upside the first target will be $1765. I have marked it on the chart as the first minor resistance. So keep your eyes open for the next few days, we are at a cross road for the yellow metal. Let the games begin!

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