Quick Fibonacci Retracement Reference Grid For Gold BounceCorey Rosenbloomupdated Apr 25, 2013TweetAt GET.com we maintain complete editorial integrity on our content & provide transparent & unbiased information. Companies don't pay us to include their products although we receive a compensation when you successfully apply to products from our partners. See how we make money here.At GET.com we maintain complete editorial integrity.After a large impulse, it can be helpful to draw a Fibonacci Retracement grid to get a sense of potential target levels or short-term inflection points paricularly for intraday traders. Let’s take a quick look at a simple confluence Fibonacci Retracement grid for the current rally or ‘bounce’ up in gold (@GC Futures): I drew two Fibonacci grids from the March 22nd swing high (blue) and the more recent April 9th high (green) which developed just ahead of the breakdown or ‘collapse’ impulse. We can already see short-term inflections that have developed into the respective 38.2% upside retracement levels on a short-term basis. A general rule for monitoring price relative to Fibonacci Levels is to use a nearby level as an intraday or short-term target (taking profits into a level) or – for very aggressive traders – using the level as a spot to enter short or ‘fade’ positions, particularly if the lower frame shows negative divergences, reversal candles, or other chart-based sell signals into the higher frame Fibonacci target. The other way to use these reference levels is to trigger a long or buy trade on the breakthrough of a level, which was the case this morning on the breakthrough above the $1,435 level (the 38.2% retracement). The impulse took price straight up to the next target at $1,455 or the 50% “halfway” point of the April 9th grid. For short-term traders, continue to focus on the levels at the moment which include $1,455, then $1,470 (on a clean breakthrough above $1,455) and $1,487 (on a breakthrough higher). A stall or short-term retracement into the $1,455 resistance level could set up a short-term play back toward the $1,435 pivot (which would now intersect the rising trendline). In fact, incorporate these Fibonacci Levels with the rising “flag” or Parallel Rising Trendline Channel as highlighted above – price has remained bound within this channel throughout the entire reaction (retracement) up so far. A breakdown of the lower rising trendline could signal a short-sell or “breakout” opportunity for those who enjoy breakout trades (it would actually be a pro-trend continuation set-up that corresponded with a trendline breakdown signal which could occur under $1,420). Continue monitoring short-term movement relative to these levels along with the ‘flag’ trendline. Follow along with daily commentary and detailed analysis each evening by joining our membership services for daily or weekly commentary, education, and timely analysis beyond the daily blog commentariesEditorial Disclosure: Any personal views and opinions expressed by the author in this article are the author's own and do not necessarily reflect the viewpoint of GET.com. The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the companies mentioned, and have not been reviewed, approved or otherwise endorsed by any of these entities.