Gold Down on Profit Taking - 18 January 2018

Alp Kocak

By: DailyForex.com

Gold prices fell $12.37 an ounce on Wednesday as a firmer dollar prompted investors to take profits from a recent rally to a four-month high. Technical selling was also behind gold’s 0.92% decline yesterday. XAU/USD tested the resistance at $1344 for the second time this week, but it was unable to break through. Consequently, prices fell below $1332 and headed back to the Ichimoku clouds on the 4-hourly chart.

Prices are still above the daily and the 4-hourly clouds, but the short-term charts suggest that a test of the 1316-1315.80 area is on the table unless prices can get back above the 1334/2 area. The Tenkan-sen (nine-period moving average, red line) and the Kijun-sen (twenty six-period moving average, green line) on the H4 chart converge in this area so the bulls will need to lift prices beyond there to revisit 1344. A daily close above 1344 indicates that the next stop will be 1350.80-1350.

xauusd daily

To the downside, the initial support stands at 1326, followed by 1323/1. The bears have to drag the market below 1321 to challenge the aforementioned support in the 1316-1315.80 zone. If XAU/USD dives below 1315.80, then 1308/7 will be the next port of call.

xauusd h4

Alp Kocak
Alp Kocak has been trading Forex since 2003. He writes technical analysis based on Japanese candlesticks and Ichimoku Kinko Hyo.

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