Gold Price Forecast – Gold markets sitting on major support

Gold markets have been sitting on major support for the last couple of trading days but were closed for Good Friday. At this point, we are at a major inflection point and could be setting up for a big move.
Christopher Lewis
Gold daily chart, April 22, 2019

Gold markets went back and forth on Thursday, and of course were closed on Friday for the holiday. At this point we are sitting at the 200 day EMA, an area that of course will attract a lot of attention. Beyond that the $1275 level is crucial when it comes to technical analysis, as it has been important a couple of times. If you squint, you can see that the uptrend line that I have drawn shows a significant head and shoulders pattern, so there are couple of reasons to think that perhaps this market is trying to break down.

Gold Prices Video 22.04.19

As I look at the Gold chart, I see two potential scenarios. The first one is that we could very well find support here and bounce, but I suspect this will probably be a simple retest of the Tuesday candle stick where we broke down through the hammer from the Monday session. That would also be a retest of the bottom of the uptrend line that makes the neckline of the head and shoulders pattern.

The second potential set up is a break down below the candle stick that formed Thursday’s trading, as it would open the door to the $1250 level, and then possibly even $1225 after that. The way the market has been acting, I suspect this is probably more likely than not. However, we need some type of confirmation on it to take action, as simply anticipating the move is a dangerous way to trade.

If we did break above the candle stick from the Tuesday session, then it’s time to start reevaluating the entire scenario laid out.

Please let us know what you think in the comments below

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