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Today’s Trading Edge: Gold slides as it continues to respect 200-day SMA

Posted by WorldWideMarkets . on Mar 30, 2017 10:11:29 PM

WWM GOLD MAR 30 2017.jpg

Gold prices declined for a second consecutive day following mixed US data.  US weekly jobless claims came in at 258,000, higher than the estimated 244,000, while Final GDP for the fourth quarter improved to 2.1%, better than both the 1.9% preliminary reading and 2.0% forecast.  The precious metal also sank following strong risk appetite for US equities.

Price action on the gold daily chart shows that price continues to respect the 200-day SMA and formed a bearish Butterfly pattern on February 27th.  Point D was confirmed with the 200% Fibonacci expansion level of the X to A leg and the 161.8% Fibonacci expansion level of the B to C leg.  If the bearish move continues, key support may come from the 50-day SMA, which currently trades at the $1,228.50.  Deeper support may come from the $1,200 to $1,210 region.  To the upside, major resistance remains the 200-day SMA, which trades at the $1,262.00 level. 

The trade: Sell Gold at $1,245 with a stop loss at $1,250 and a take profit at $1,230. The Risk/Reward Ratio is 1:3

Topics: precious metals, gold

 

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