FX.co ★ Gold: analysis for December 27, 2013

Overview:

Since our last analysis,Gold has been trading upwards, as we expected, the price tested the level of 1,215.53 (FE 100 %) on ultra high volume (buying climax). According to the 1H chart, Gold is in bullish corrective phase, so we placed Fibonacci expansion to find the levels for potential end of the bullish corrective phase. We got FE 61.8 % at 1,205.22 (already broken), FE 100 % at 1,213.15, and FE 161.8 % at the price of 1,225.97. We can also see decreasing volume on upper legs which is good sign for further bearish continuation. Anyway, if the price breaks the area of 1,215.53 on high volume, we may see the testing of FE 161.8 % at 1,225.90, before we start with bearish continuation. Don't forget, Gold is in bearish trend so buying looks very risky. Watch for selling opportunities after the bullish corrective phase ends.

Daily pivot Fibonacci points:

Resistance levels:

R1: 1,213.55

R2: 1,216.19

R3: 1,220.47

Support levels:

S1: 1,204.99

S2: 1,202.35

S3: 1,198.07

Trading recommendation: Trading the metal, be careful with short-term buying and look for selling opportunities after the bullish corrective phase ends.