The Most Important Trendlines to Watch in Gold Today
After a stellar move higher in Gold, price now faces a challenge of converging trendlines into the $1,630 area.
Let’s take a quick look at the current price level and develop a simple game-plan from there.
Here’s Gold (futures @GC) on the Intraday Hourly “Structure” Chart:
I drew two simple price trendlines that connect as many price highs and lows as possible.
The first is the Horizontal Support Line stretching from December 2011 to the present spike into $1,630.
#-ad_banner-#The second is the Falling Trendline which connects to form a broader Triangle Price Pattern with “Apex” or Convergence here at $1,630.
We could also draw a lower trendline into the $1,550 level but we can also see how buyers stepped in during May’s lows as they did in December 2011 (and September 2011).
While there’s many other ways you can analyze the current Gold price chart, be sure to take into account this trendline convergence or overlap into the $1,630 area.
That doesn’t mean price is required to reverse here – it’s just a key level on which to focus and plan short-term trades depending on whether trendline resistance holds (bearish if so) or breaks (bullish above $1,640 for confirmation).
A push/breakthrough beyond $1,640 strongly suggests a Structural Reversal of the short-term trend, implying higher targets ($1,670, $1,700, etc) could be achieved in the context of a new intraday uptrend.
The recent push above $1,600 locked in a “Higher High” which is the first step to a structural reversal).
As a quick additional note, the falling 50 day Exponential Moving Average – which has held successfully as resistance from March 2012 to present – rests at $1,620 to form an additional indicator confluence with the $1,630 area.
Keep an eye to this level as we see whether Buyers/Bulls or Sellers/Bears win the current “Battle for $1,630″ and $1,600.