- April 9, 2021
- Posted by: Tradingshot Articles
- Category: Commodities
Gold reached yesterday the 1760 Resistance which is a very critical level as it may currently be the Resistance (since March 01) but is a Pivot as it was formerly a Support (two contacts: November 30, 2020 and February 18, 2021).
It is no surprise that the price got rejected there as besides the 1760 Resistance, it also touched the 1D MA50 (light blue trend-line), so short-term buyers naturally booked profits. What happens on the medium/ long-term though?
Well the most important development is the emerging (will have formed by Monday) Golden Cross on the 4H chart. Last time we had the MA50 (dark blue trend-line) crossing above the MA200 (orange trend-line) was in December 22, 2020). What followed then was an aggressive rally to the 1.618 Fibonacci extension. Assuming the same pattern is replicated, then medium/ long-term traders may target 1800 (just below the 1.618 Fib ext) and 1825 (roughly where the 1W MA50 (yellow trend-line) will be at the time). Why the 1W MA50 is important? Because it is a Pivot as well, signaling trend changes on the long-term. As long as Gold trades below it, the trend remains bearish, above it we have a trend shift. Notice how the price found Support there twice (November 30, 2020 and January 18, 2021) and now has turned into the long-term Resistance that may reject the price.
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