Fibonacci Retracement Lines Show – Gold Meets Significant Support Level
December 21st, 2009 Posted in In-Depth Analysis, Oil and Precious Metals, Technical Analysis
Name: Yan
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It wasn’t so long ago that gold was trade for over $1,220 an ounce. However recently gold saw a bearish trend, and is now traded for less than $1,100 an ounce. A Fibonacci Retracement Lines study shows that gold is approaching a very strong support level. If this level is breached, further depreciation could be expected.
• The chart below is the Gold daily chart.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index. The Fibonacci Retracement Lines were used as well.
• Both the Slow Stochastic and the MACD are showing a bearish cross, stating that the trend is indeed bearish.
• The RSI has dropped below the 30-line and has failed to rise above it since. This indicated that the momentum is still bearish.
• The Fibonacci Retracement Lines show that the pair is on its way to reach the 61.8% line, which is located at the $1,088 level.
• If the pair will breach through this level, it is likely to drop further towards the 50% line. This is located at the $1,042 level.
• However, if the pair will fail to cross this support level, it has the potential to rise back up towards the 76.4% line, which is located at the $1,140 level.
