Short from 1239.6 at AB=CD 161.8% ext...

Looking at the weekly chart this morning, the yellow metal recently struck the underside of a weekly resistance level seen at 1241.2. While this may be the case, down on the daily chart the bulls convincingly closed above daily supply at 1232.9-1224.5 (now acting support area). This does, of course, create somewhat of a conflict between the two higher timeframes. In our experience, however, it is usually the higher timeframe that leads the way, so we’re in favor of a selloff materializing in the not so distant future.

Over on the H4 candlesticks, bullion advanced up to the H4 AB=CD (see black arrows) 161.8% ext. at 1241.9 amid yesterday’s segment, which, as you can see, is holding ground for the time being. For those who read Wednesday’s report you may recall that we highlighted this zone as a possible reversal area. Given that the weekly resistance level is now in play, our team has shorted on the close of the last bearish H4 candle at 1239.6ish, with a stop logged in at 1245.4. Our first target objective can be seen at the H4 demand area formed from 1227.6-1230.5.