GOLD (XAU/USD)

WEEKLY PRICE ACTION ANALYSIS

The price is being held in channel marked by the yellow trend lines M and N as shown in our chart below. Price is approaching the immediate strong support zone around 1296.81 marked by the red horizontal line H. You can also see the moving average flattening.

A close below H may lead price to retest the lower channel trend line support N. Depending on the momentum and price action then, candle close below N may lead price to retest the previous lows around 1142.16 support zone marked S.

On the other hand, a strong bounce off H may lead price to retest the previous highs in the M trend line resistance zone around 1358.62. Close above M may see price aim for higher highs around 1458.71

For now, keeping the trading within the channel marked by the yellow trend lines as we await larger time frame confirmation.

EURGBP, DAILY PRICE ACTION

MULTI-TIMEFRAME ANALYSIS

WEEKLY CHART

The price reacted so fast with rapid selling after hitting resitance R zone. Currently price is in a channel congestion marked by the red trendlines A and B.  This means we keep trading within the channel until we see a convincing break of the channel..

A break and close of weekly candle above A, may lead price to retest the previous resistance zone R around 0.92293.  Break close of weekly candle price below trendline B, may lead price to the previous strong support zone marked S around 0.84737.

The immediate reaction off the resistance zone, implies a strong bearish bias. This bias will be maintained if price in the channel keeps below the 21 Simple Moving Average in the chart above. 

But since anything can happen in the markets, keep the trading within in the channel and wait for price confirmation on the channel break either way.

Lets look at the channel clearly on the daily time frame:

DAILY CHART

 On the daily chart, we can clearly see the price action in the channel. The red trendlines A and B are same as those on the weekly chart.

So what we are seeing n the daily chart is price in a small channel too marked by blue trendlines a and b.

A break and close of daily candle above blue trendline a, may lead price to retest the immediate resistance marked by purple trendline T. Strong close above T can lead price high above into the ultimate weekly trendline resistance A.

Meanwhile, a close of daily candle below blue trendline b, may lead price to retest the immediate support zone marked by purple trendline H. The H zone is the same as the 21 Simple moving  average zone, this makes it quite a strong support zone. 

A strong close below H can lead price  into the strong weekly support zone marked by red trendline B.

Daily chart congestion indicates keeping lower timeframe trading on 4-hourly or hourly in the small daily channel marked by blue trendlines a and b, until we get a daily candle close above/below the channel.