Gold has built a strong head and shoulders top, especially on the 4 hour chart below. Friday finally saw some bear volume at close, after a week of oil, EUR and gold spiking up lockstep with the movement of the USD. Looking for a difficult neckline break with a backtest to the neckline Grinding upwards along the neckline on low volume before complete failure. This market is well overdue for a reversal back below $1300. Confirmation level is a breach of $1325.
This is very dependant upon the action of the EUR/USD. Neutral to dropping and gold will collapse.
This is very dependant upon the action of the EUR/USD. Neutral to dropping and gold will collapse.
Comment:
This has been an ugly sideways drop. Is gold being buoyed by funds from the stock markets looking for safe haven following a 1,100 drop in NY? Euro initially dropped, but rallied right back-so we will call the euro neutral with gold in a non-trending drop. This is a poor trade with no momentum. Moving to the sidelines and looking for gold to rally strongly from $1,306 support - that's the long trade worth pursuing.
Comment:
Abandoning the short trade to wait for better long trade setup from $1,296 to $1,306 range. After entry in range looking for gold to challenge $1,360 high in a strong upmove. Given the resistance to dropping, I suspect gold may barely get into my target long entry range so I will enter on any bullish pin at that falls into range.
Trade closed manually
