Gold: Bearish Divergence as Trend Reversal Signal
The market gives us a trend reversal signal based on a bearish divergence. The price is bouncing from 1700.00 resistance zone, and a bearish candle is going to confirm the price reversal. The same goes for RSI and MACD histogram. DMI is bullish and tells us about the trend market conditions. But ADX line is falling, and it is a signal that buyers are not so strong now. We can expect a trend reversal or at least a correction movement in the main uptrend.
How to trade?
If we have the trend reversal signal in the bullish trend, it means we should search for sell opportunities. As we have a local uptrend line not far from a potential entry point, it will be better to open sell trades as close to 1700.00 as possible. Of course, sell trades must be opened following the reversal signals. The breakout below the local uptrend line will confirm the trend reversal and a further downward movement to SMA100, SMA200. Reversal signals from these trend lines will be used for buying in the direction of the main trend.
Disclaimer!
This post does not provide financial advice. It is for educational purposes only! You can use the information from the post to make your own trading plan for the market. But you must do your own research and use it as the priority. Trading is risky, and it is not suitable for everyone. Only you can be responsible for your trading.
How to trade?
If we have the trend reversal signal in the bullish trend, it means we should search for sell opportunities. As we have a local uptrend line not far from a potential entry point, it will be better to open sell trades as close to 1700.00 as possible. Of course, sell trades must be opened following the reversal signals. The breakout below the local uptrend line will confirm the trend reversal and a further downward movement to SMA100, SMA200. Reversal signals from these trend lines will be used for buying in the direction of the main trend.
Disclaimer!
This post does not provide financial advice. It is for educational purposes only! You can use the information from the post to make your own trading plan for the market. But you must do your own research and use it as the priority. Trading is risky, and it is not suitable for everyone. Only you can be responsible for your trading.
Disclaimer
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