Another FED day, another two very possible scenario
Updated
Last thursday GOLD broke the trendline resistance forming an unevitable new uptrend which may still be affect by FED ANNOUNCEMENT happening tomorrow and next week upcoming events.
During London session, we might see another classic retest to the new born mid-support 1233.50 (also a fib level 38.20%).
IF this occurs,also considering stochastic direction,then 2 scenario will appear considering the important speech by FED to take place at 9.25 am NY time.
SCENARIO 1
USD too strong for the mid-support(1233.50) to hold, so GOLD go retesting the new uptrend support at 1223 (also a fib level 23.60%) creating a new high-low, and if it doesn t surprisingly hold, then we are heading towards 1215 area again.
SCENARIO 2
USD turns out to be weak and GOLD bounce back from the mid-support (1233.50) to the new uptrend resistance in order to retest it and which would be 1242.50 (fib level 50.00%, the strongest one so far) ; if it doesn't hold then we finally might see 1251(fib level 61.80%), if it does hold, then back to fill up this new trendline empty sheet by testing support again.
Therefore Im personally short in the short term and long in the long term.
Happy and profitable trading to everyone.
During London session, we might see another classic retest to the new born mid-support 1233.50 (also a fib level 38.20%).
IF this occurs,also considering stochastic direction,then 2 scenario will appear considering the important speech by FED to take place at 9.25 am NY time.
SCENARIO 1
USD too strong for the mid-support(1233.50) to hold, so GOLD go retesting the new uptrend support at 1223 (also a fib level 23.60%) creating a new high-low, and if it doesn t surprisingly hold, then we are heading towards 1215 area again.
SCENARIO 2
USD turns out to be weak and GOLD bounce back from the mid-support (1233.50) to the new uptrend resistance in order to retest it and which would be 1242.50 (fib level 50.00%, the strongest one so far) ; if it doesn't hold then we finally might see 1251(fib level 61.80%), if it does hold, then back to fill up this new trendline empty sheet by testing support again.
Therefore Im personally short in the short term and long in the long term.
Happy and profitable trading to everyone.
Trade closed: target reached
Didn t expect this to happen during london session because ,as I wrote, I was expecting GOLD to retest new support...ANYWAY I DID NOT ENTER ANY TRADES because there was still not enough confirmation to do so, in fact GOLD broke straight the resistance at 1242.50 (50% fib) and reached next one at 1251 (61,80% fib)....BUT my way to do trading defends me from the risk that this market with his volatility creates all the time :
-I ENTER TRADE just when important level are broken, indicator like stochastic shows that movement is going that way and economic news that justify the trend.
-I EXIT TRADE just when new important level is reached or about to be reached and usually on 4h chart there is enough to take a nice profit (IN THIS CASE ABOVE FIB 50%= 1243 LONG TO 1251 =80 pips)
_StOP LOSS are placed in the area where, if the market reaches it, means there is a change in the trend and that was just a testing (IN THIS CASE BELOW FIB 50% = 1240)
this teaches how important is to have VALID LEVEL OF RESISTANCE AND SUPPORT to see what are the key area the market is going to break, test or retest whatever was your "prediction" during the study of your chart, and enter just when there is enough confirmation to do so(broken resistance, stochastic pointing up, volume green above standard level, fib level and trend resistance broken.
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