Where Did You Gold? - Correction in Gold Price Post Election Expected to Start Soon

The price of gold has been buoyed by the U.S. election outcomes as the U.S. dollar slides into the hands of the bear’s on what most would describe as an inevitable outcome and this leads us into a more rational sentiment, now that dust is settling in.

The following is a top-down analysis that illustrates where an optimal bullish entry could be derived in anticipation of a correction on the weekly and daily charts.

Monthly chart

There is still room to the 38.2% Fibonacci retracement in what would be a complicated correction. However, the current support structure holds for the time being and opportunities to trade could be in place on the lower time frames. 

Weekly chart

The price found support and rose to resistance which has now turned support following a higher low and subsequent break of the old resistance. 

Daily chart

From a daily perspective, the price had completed a reverse head and shoulders in breaking the prior resistance.

On a pullback, the 38.2% Fibonacci has a confluence with the first layer of support and the 61.8% with the second and prior higher high which meets the 21-day moving average.

In anticipation of a bullish continuation, bulls could be prudent to first wait for a healthy correction to either of these two supports.

Should, however, the market continuation occur without a meanwhile correction, the weekly structure will be back in focus. A correction back to the weekly resistance would, therefore, be expected instead:

Any such price action can be traded on a lower time frame, including, the 4-hour chart from where optimal trade entries can be monitored, according to either bullish or bearish technical conditions. 

The current environment remains bullish, so there is nothing to be done at this stage, for it is never wise to buy at resistance.

For more information please refer to the original analysis: https://www.fxstreet.com/analy...