As Gold continues to set new all-time highs, traditional structure analysis techniques face unique challenges due to the absence of historical resistances.
But, there is one proven technical analysis strategy, that will help you to easily identify the next significant structure resistances on Gold chart.
In this article, I will teach you to apply wave analysis, fibonacci levels and harmonic movements to spot the next key levels on Gold.
1. Wave Analysis
First, let's execute wave analysis on Gold on a weekly time frame.
With wave analysis, we underline significant bullish movements - at least 3 - from their low to their highs.
Also, remember that 2 or more waves may compose one single wave.
Here are 3 recent bullish waves that I identified on Gold.
2. Fibonacci Analysis
Based on the underlined waves, we will apply Fibonacci Analysis.
We will apply Fibonacci Extension tool.
Here are the Fibonacci Levels that we should add: 1.272, 1.414, 1.618
When we draw Fibonacci Extension of bullish waves, we apply the tool strictly from the low of the impulse to its high.
Here are the extension levels of the bullish waves that we identified.
3. Confluence
Based on the Fibonacci extension levels, identify the areas where at least 2 Fib. Extension levels of different waves match.
Such areas will be called confluence zones.
Here are 3 confluence zones that I recognized.
After that, remove fibonacci levels from your chart to make it clean.
4. Harmonics
Identify potential harmonic movements.
Copy bullish waves that we identified and project it from the completion points of the retracements after completion of the waves.
After that, identify the confluence zones between completion points of the harmonic movements and Fib.confluence zones.
That will be a potentially important resistances to watch.
Clean your chart, then.
Pay attention to these resistances because a bearish reversal may easily initiate from one of those areas.
