Gold is Targeting #1,827.80 extension on the Fed aftermath
Gold's general commentary: Gold has so far managed to break below the key #1,877.80 pivot line, holding from February #17 and that development alone attracted Gold Sellers which dragged the Price-action towards #1,852.80 psychological barrier, forming an Bottom which can be the Higher Low’s on the Daily chart’s steep Descending Channel that started after the April #19 Higher High’s peak. Hourly 1 chart is turning Neutral which is a Natural reaction on Higher Low’s Bottom formations and I personally expect (within #4 session horizon) an decline in continuation towards the #1,831.80 - #1,827.80 zone which should be turned into a Support if this #3-week consecutive Selling spree is to be transfered on the Medium-term as well. Then, if that configuration breaks, my Target will be #1,800.80 barrier. Note that currently it is the DX which keeps Gold on recent Low’s, as the Bond Yields, though Bullish on the Medium-term, rebounded on its Support zone and is now pricing in new Resistance zone. I am expecting FOMC to go in my favour and add credence to Gold’s Sellers.
Technical analysis: It is Technically too dangerous to Buy Gold at the moment with #2 strong Resistances ahead (I will Buy only if #1,886.80 breaks once again and market closes above it), and in the same manner, it is too early to Sell Gold, since #1,852.80 Support zone (psychological barrier) is well preserved and showcasing strong durability. Gold keeps close track of the DX (strongest correlation I have at the moment) and Bond Yields (# +1.11%), as in the absence of macro-economic news regarding today's session, correlating assets were near Higher High's peak (both), ignoring though the Usd-Jpy Trading near the Support zone (on Short-term decline), which showcases that Gold continues to be detached from Usd-Jpy pair and follows DX / Bond Yields and rallies don’t (as for the current configuration at least) translate into equal rallies on Gold as long as DX isn't falling. Gold is not too close to the Daily chart’s #MA50 (which was broken only twice since February #2) and this is not the time to take wild bets on the market that is obviously waiting for catalysts to move. Right now Selling towards the Daily chart’s Support zone, having a stop on the Hourly 4 chart’s Resistance near #1,861.80, is the most optimal Trade to take, if of course current variance allows and delivers Selling confirmation (breaking of #1,852.80). Today’s U.S. session aswell should have Selling sentiment, but as I cannot rule out Bullish extended recovery fuelled by Resistance zone break, I will remain comfortably on sidelines, waiting for the breakout and observing market closing Price, unless one of the benchmarks break.
Extended Technical analysis: It is important to note that Gold is cyclical asset and what caught my attention is current (#6-Month old) fractal. Gold tends to engage the aggressive takedown after Double Top rejection on Daily chart. Throughout May #26 - July #11 fractal, Gold made an Double Top break attempt but got rejected and engaged the #140 point decline. On July #15 - August #8 fractal, Price-action made an Double Top formation and engaged the (almost #150 point) slide. Similar fractal could be repeated now, and if Gold honours it, I am looking at decent possibility of #1,827.80 Lower Low’s Upper zone extension test, and break of can put final Selling extension in motion (Medium-term), currently Trading on #1,585.80 (April #6, #2020) Low. Regarding the RSI indicator (strongly limiting the uptrend), variable is still not close to Medium-term Resistance, which is rejecting the Price-action since June #10. Means that Gold Priced in a Top on #1,900's zone (temporarily or not).
Since many Traders made an inquiry regarding how I determine / should position be kept or closed (when is the best time to close the order):
Notice that I’ve referred to this approach as a guideline. It requires thinking (constant monitoring of the Gold charts) and work on Trader’s end to ensure these guidelines maximize the effectiveness of Investing style. All Investors are different, so there is no hard-and-fast Buying / Selling rule which all Investors should follow. Even with these differences, it is vital that all Investors have some sort of “exit strategy”, which I call Risk management (which I am using, especially if Volatility is on the market). This will greatly improve the odds that the Investor will not end up holding worthless Position at the end of the session which will provide nothing more than losses. The point here is to think critically about every Position and what could go wrong (especially Fundamental shocks), also create an scenario in which Trader / Investor executes the Position to protect the remaining capital / capital preservation is equally important as a Profitable call, and trust the model (reasons) why he / she entered the market in the first place. Trader should know what his / hers Investor style is and then use mentioned strategy to stay disciplined, keeping the emotions out of the market which can harm the capital. Myself, my approach is more Medium-term and I rely mostly on Technical side. So, Traders understand that the answer to your question is not very easy to give. There are numerous parameters to account to, and even then, there are news that may distort all this.
Regarding many Stimulus inquiries: U.S. Stimulus creates more money / cash supply, aswell inserts more cash into the economy. That development alone devalues the value of the DX, which in turn creates Inflation. Gold is a traditional deflationary asset and the market seeks to 'park' capital to Gold in order to protect it’s value from Inflation. Gold is described in economic books as a Store of Value and well known Safe-haven. This is why (or as it should be) Central banks should hold Gold as reserves for every Dollar (or any other domestic currency) they print.
My position: Gold is close to a critical point on the Hourly 4 chart. Buying every Low for the #4th consecutive time, candle sequence that was last seen on December #2013 that led to a new Yearly Top. According to the fractal, December's #1,230.30 bottom was crossed, Gold extended the decline by shorting the #1,365.30 High. I expect the same at the moment - small pullback and #1,861.80 - #1,871.80 test, then final push towards #1,831.80 - #1,827.80 zone extension. Personally, based on my experience, Gold always repeats it’s own trends / cycles as I found many similarities with current fractal. As discussed above, I will remain without a position, awaiting one of the benchmarks to break. As I am not interested in Buying Gold regarding both Short and Medium-term, #1,850.80 will trigger my Selling order where I will be ready to pursue #1,831.80 configuration in extension.
Technical analysis: It is Technically too dangerous to Buy Gold at the moment with #2 strong Resistances ahead (I will Buy only if #1,886.80 breaks once again and market closes above it), and in the same manner, it is too early to Sell Gold, since #1,852.80 Support zone (psychological barrier) is well preserved and showcasing strong durability. Gold keeps close track of the DX (strongest correlation I have at the moment) and Bond Yields (# +1.11%), as in the absence of macro-economic news regarding today's session, correlating assets were near Higher High's peak (both), ignoring though the Usd-Jpy Trading near the Support zone (on Short-term decline), which showcases that Gold continues to be detached from Usd-Jpy pair and follows DX / Bond Yields and rallies don’t (as for the current configuration at least) translate into equal rallies on Gold as long as DX isn't falling. Gold is not too close to the Daily chart’s #MA50 (which was broken only twice since February #2) and this is not the time to take wild bets on the market that is obviously waiting for catalysts to move. Right now Selling towards the Daily chart’s Support zone, having a stop on the Hourly 4 chart’s Resistance near #1,861.80, is the most optimal Trade to take, if of course current variance allows and delivers Selling confirmation (breaking of #1,852.80). Today’s U.S. session aswell should have Selling sentiment, but as I cannot rule out Bullish extended recovery fuelled by Resistance zone break, I will remain comfortably on sidelines, waiting for the breakout and observing market closing Price, unless one of the benchmarks break.
Extended Technical analysis: It is important to note that Gold is cyclical asset and what caught my attention is current (#6-Month old) fractal. Gold tends to engage the aggressive takedown after Double Top rejection on Daily chart. Throughout May #26 - July #11 fractal, Gold made an Double Top break attempt but got rejected and engaged the #140 point decline. On July #15 - August #8 fractal, Price-action made an Double Top formation and engaged the (almost #150 point) slide. Similar fractal could be repeated now, and if Gold honours it, I am looking at decent possibility of #1,827.80 Lower Low’s Upper zone extension test, and break of can put final Selling extension in motion (Medium-term), currently Trading on #1,585.80 (April #6, #2020) Low. Regarding the RSI indicator (strongly limiting the uptrend), variable is still not close to Medium-term Resistance, which is rejecting the Price-action since June #10. Means that Gold Priced in a Top on #1,900's zone (temporarily or not).
Since many Traders made an inquiry regarding how I determine / should position be kept or closed (when is the best time to close the order):
Notice that I’ve referred to this approach as a guideline. It requires thinking (constant monitoring of the Gold charts) and work on Trader’s end to ensure these guidelines maximize the effectiveness of Investing style. All Investors are different, so there is no hard-and-fast Buying / Selling rule which all Investors should follow. Even with these differences, it is vital that all Investors have some sort of “exit strategy”, which I call Risk management (which I am using, especially if Volatility is on the market). This will greatly improve the odds that the Investor will not end up holding worthless Position at the end of the session which will provide nothing more than losses. The point here is to think critically about every Position and what could go wrong (especially Fundamental shocks), also create an scenario in which Trader / Investor executes the Position to protect the remaining capital / capital preservation is equally important as a Profitable call, and trust the model (reasons) why he / she entered the market in the first place. Trader should know what his / hers Investor style is and then use mentioned strategy to stay disciplined, keeping the emotions out of the market which can harm the capital. Myself, my approach is more Medium-term and I rely mostly on Technical side. So, Traders understand that the answer to your question is not very easy to give. There are numerous parameters to account to, and even then, there are news that may distort all this.
Regarding many Stimulus inquiries: U.S. Stimulus creates more money / cash supply, aswell inserts more cash into the economy. That development alone devalues the value of the DX, which in turn creates Inflation. Gold is a traditional deflationary asset and the market seeks to 'park' capital to Gold in order to protect it’s value from Inflation. Gold is described in economic books as a Store of Value and well known Safe-haven. This is why (or as it should be) Central banks should hold Gold as reserves for every Dollar (or any other domestic currency) they print.
My position: Gold is close to a critical point on the Hourly 4 chart. Buying every Low for the #4th consecutive time, candle sequence that was last seen on December #2013 that led to a new Yearly Top. According to the fractal, December's #1,230.30 bottom was crossed, Gold extended the decline by shorting the #1,365.30 High. I expect the same at the moment - small pullback and #1,861.80 - #1,871.80 test, then final push towards #1,831.80 - #1,827.80 zone extension. Personally, based on my experience, Gold always repeats it’s own trends / cycles as I found many similarities with current fractal. As discussed above, I will remain without a position, awaiting one of the benchmarks to break. As I am not interested in Buying Gold regarding both Short and Medium-term, #1,850.80 will trigger my Selling order where I will be ready to pursue #1,831.80 configuration in extension.
- My official and only Telegram Channel: t.me/goldenBear88
- I do provide professional Gold consulting (signals and financial advice) and Gold Trading school.
- Trading Gold since #2012'.
- I do provide professional Gold consulting (signals and financial advice) and Gold Trading school.
- Trading Gold since #2012'.
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