3 Technical Analysis Tools to Identify Resistance Levels on GOLD

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How to trade Gold when it is constantly setting new all-time highs?

When Gold is trading beyond historical levels, technical analysis can help you to identify the next potentially strong resistance levels.

In this article, I will teach you the only 3 technical analysis tools you need to find the next key resistances and predict future correctional movements on Gold chart.

Tool 1 - Trend Line

The first technical analysis tool that will help you to identify a potentially strong resistance is a trend line based on previous highs.

Simply analyze the previous historic highs and try to find a trend line that was respected by the market at least 3 times in the past.

It means that such a trend line should be based at least on 3 historic highs.

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Look at that rising trend line on Gold on a daily time frame. It is based on 3 historic highs, and it can be a potentially strong resistance.

Tool 2 - Psychological Levels

The second technical analysis tool is psychological levels.
These levels are based on round, whole numbers.

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In our example, the closest psychological level is 2500 level. This level is based on round numbers, it is a multiple of 500 and 100.

It can compose a potentially strong resistance cluster.

Tool 3 - Fibonacci Levels

The third technical analysis tool is Fibonacci extension and confluence.

In order to identify a potentially strong resistance with Fibonacci extension, you should identify at least 3 last bullish impulses/waves.

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Above is the example of 3 significant impulse legs on Gold chart on a daily.


Draw Fibonacci Extension levels based on these 3 impulse legs.

Here are important Extension levels to consider:
-1.272
-1.414
- 1.618


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Above, you can see how I draw Fibonacci Extension levels based on all the impulse legs that we identified.

Your task is to identify the point where the extension levels of 3 impulses match in one point. Such a point will be called confluence zone.

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This confluence zone will be the next potentially strong resistance.


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These 3 technical tools helped us to identify the resistances beyond all historical levels easily.

Remember that there is no 100% guarantee that all the resistances that we spotted will be respected by the market.

For that reason, you should strictly analyze a price action and a reaction of the price to these levels before you open a short trade.

Alternatively, remember that these resistances can be applied as the targets for long trades.

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