Well, after yesterday's explosive move down, it's not surprising that Gold took a pause today. With a total range of 15.3 points, the net down move today was 1.9 points. I did take a new short position early in the morning and I'll get to that later in this post. I'm expecting to come back into the market tomorrow and Friday as there are a couple of big news events. Tomorrow at 4:30 am PST is the ECB Meeting Accounts. With Brexit on everyone's mind, this will be an interesting event to say the least. This is followed an hour later by the US Initial Jobless Claims report at 5:30 am PST. And then on Friday is our friend, Nonfarm Payrolls, at 5:30 am PST. These events are almost guaranteed to get the markets moving again, perhaps finishing off the downward cycle in Gold .
Now on to my trade. As I mentioned yesterday, I was waiting for a good pullback in Gold so I could re-enter and catch another wave to the downside. Using the hourly chart, at 5 am, price came up, penetrated the upper BB and then the next hourly candle failed to take out the high. Also, the was in overbought territory. While not a picture perfect pullback, with a tight stop, the risk was containable. For my profit target, I am using a weekly chart and the lower BB which is at 1243.50.
Hopefully, we'll end the week with some good movement to the downside.
Safe Trading and Protect Your Profits.
Hourly Chart Weekly Chart