Why The Recent Gold Rally Could Be Jeopardised : USDX!

Updated

https://www.tradingview.com/x/ObHTdfVc/

It's Long Gold for the moment & I mentioned a break about 2500.21 would be the breakout point!

I already see signs of the Gold rally losing steam. Well, let's call it a short term rally or a retracement rally of something greater.

You see, since about midday Tuesday, so not even 48 hours ago, the USDX has been back-pedalling. I see it as a retrace to it's 38.2 Fib level and then the Gas could go onto the USDX because once something finishes it's Fib retracement it usually follows in its intended direction, the opposite direction to its retrace, the course and trajectory it was previously on, which for the USDX is upwards IMHO. This will bring 'Shorters' into Gold.

So, in summary the USDX as seen on the 4HR chart has retraced to about 50% on the Fib scale, I will be watching closely to see if it moves down further to 38.2%, or even worse for Long gold punters, that it breaks upwards from 50%.

We know from last Friday, the damage it caused when it broke 101.50. In trading, history tends to repeat.

Gold & the USDX do not always follow their Inverse price relationship. But it happens about 80-90% of the time.

Cheers

Chris
* Trading is risky. Please don't rely solely on my financial advice or trade setups.
* Whilst I do my best to bring the most up to date Gold strategy, Gold trading moves very fast and so do it's variables.

See chart.

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Here is the Gold Charts (about 4am NY Thurs 5 Sept 24).
You would be doing well if you got in at the break above 2500.21.
Recent resistance starts at 2513 & then its a bit of a slog right up to the tricky bit above 2528-29

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This current resistance is just that. I expect price to push through this resistance soon.

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One thing I am watching is the 15m stochastics and rsi. So in other words, price needs to hold up at these levels. Sellers will move in once price drops to a good sell level.

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We are about to break through

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Up and Up that is.

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10 second timeframe
Retracing and up through the recent Tops

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Price almost broke out but a new Top 3 formed very quickly.

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See the support form on the yellow 9ema

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USDX is sitting in a good price for Gold. Until it wakes up and rallys.

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This is a 2m, 5m, 15m charts for Gold.
You can see how things change so quickly as price is finally rejected at going further upwards.

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I am Short on Gold for the next while.
I also got a stochastic x/down on the 15m timeframe.
USDX has moved up marginally.

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Stochastics and RSI I find are not very reliable at predicting future price movement.
But they are very accurate at determining supply and demand in real time.
Plus they are momentum indicators.

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Bank Institutions bought back into Gold in a big way today in Thursday Asia Trading. You can see the FVG Unfair Value Gaps, the big bullish Candles. Once 2500 was beaten, the buying rolled on for a long while.
Given all these Long Positions of Banks etc back in Long Gold, it's not a bad place to be only 2 weeks out to the day for the FOMC meeting on US interest rates. That will be a big day for Gold.

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As I mentioned about 30-45 minutes ago I got Short. It was risky Short so I did not want anyone else to follow my trade.
Here are the Fib Levels. I have 7 Short Orders in Gold selling the first order up at 2516.45. I am trying to get TP & be filled at around 2512.60 level.
You can see the Fib levels as price retraces and at last glance price was forming around the 61.8 level. But by the time I post this it could be much worse or better position.

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AN M_Top Breach at Neck was my reason to go short.
I got hammered. I had to close out and get long again.
It tells me Gold is very bullish.

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BUY GOLD FIB RETRACE

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In Case you missed the economic data like I did taking a nap.

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Economic Data & All The Ducks Seem To Line-Up For Gold Buying.

Supply and Demand. The First Round Of Buyers Have Sold.

Opening a Buying Opportunity NOW on the Fib Retracement.

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Now its a very very deep retracement due to a RETEST of a BULLISH 1M HEAD N SHOULDERS.

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PRICE HAS RETESTED THE NECK
BUY AT THESE PRICES YOU SHOULD DO VERY WELL

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SEE HERE Demand Is Flooding back in for GOLD
RSI
STOCHASTICS
(ABOVE)

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The mid-time-frame RSI & Stochastics are still overbought.
So that is the reason price is drifting a little lower than I anticipated.
H&S patterns usually have a rebalance following their retest.

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Buy the Gold Price.
I see this very bullish green pin-bar where buyers have swarmed in.

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I am staying long until I see otherwise. IE a big price drop from these levels.
Here are the Fib levels.
Price on NY open could either retest the neckline again or retrace to 38.2 before getting support and shooting higher.

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Here on the 4HR chart a bullish cross of the yellow 9ema up & through (crossing) the blue 50ema.

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I often call them Unfair Value Gaps.
See here where the institutions bought up today & some Asian traders.
Then the retail-traders have 'fed' from the FVG created by the institutional candle.

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Gold price should be getting a big push up soon.

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Lower timeframe Stochastics and Rsi oversold.

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So many things to watch variables trading Gold
USDX has wound back to 101.02 but it looks primed to rally soon to me.

Order cancelled

USDX rally

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I did mention earlier that the one caveat on gold continuing up today after a strong session is Asia, was that the USDX had retraced down for the past 48 hours, but it retraced to its 38.2% fib level. I warned right before NY that I thought it was primed to rally.
I sincerely hope you were able to get out without too much loss.
This could turn around later.
The economic data was good for gold.
Cheers,
Chris

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USDX weakness starting to form. Unconfirmed until neck is breached. Good for Gold longs if it occurs.

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But due to its oversold condition on 4hr Daily Weekly it breaks out.

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I am seeing a rally Long in Gold starting to form up. XAUUSD is oversold. USDX appears to be taking a break. Lets see.

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See here the 5m sell-off trend line for Gold. So long as the USDX stays quiet. It has rallied so maybe it will rest now.
There is some hope for gold making a come back as a long buy pretty soon,

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A Stop Loss could be placed at 2503.90 for a LONG position in XAUUSD at market price.

Trade active

Long XAUUSD
Market Price below 2507
SL 2503.90

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Price has shot up quick. If you missed the order below 2507. Let's wait for a retrace.

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This is the 2m comparison between usdx and gold
usdx moving down a falling wedge for the moment.
gold on the right is forming a nice upward cup.

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USDX is moving down currently, here are the retracement levels for Gold where you could maybe get Long at the 50 or 38.2 level even better.

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2504.95 would be my suggested SL

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Getting in Long at 2507 would be Gold!
Stop LOSS 2504.95

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The USDX is NOT rallying (left of screen)
Gold (right of screen) 1hr chart price well above 50ema, we need some buying to get price back above the 9ema up around 2509

Trade closed: target reached

Take Profits

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I am seeing a bullish double bottom emerge for usdx
Plus a bullish head n shoulders
This will be disastrous for long gold soon,

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Stay long if you wish. That is only my recommendation from what I see on the charts.

Easy_Explosive_Trading

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