Support and resistance levels mark region where price may reverse
Support and resistance levels are colour coded so that we can see previous ‘tests’. The more each level was tested in the past (follow the numbered bubbles), the stronger it is likely to be.
Of course 1270 – 1280 is the most critical support zone in my humble opinion. Market sentiment is likely to change to bearish if gold price falls below 1270 reversing the entire price gain made in the month of August. It could also be read as a sign of price starting a new down leg.
How will gold price action turn bullish?
The most bullish scenario is a price rally penetrating orange zone above 1360. It eliminates overhead resistance, sets July high as support and turns the move below trend line today into sellers’ remorse or technically speaking dead cat bounce.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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