Gold on Short-term crossroads / #1827.80 ahead

Gold's general commentary: As I noted in my previous commentary about fragile DX standard (right now it's already few percents down) Gold is already giving signs of Bearish momentum. Current Selling spike on Gold came as no surprise since Gold is not (as it has been) sole hedge against inflation and current Trading week is projected to be Bullish for Bond Yields (on a mini recovery), hence Bearish and adding Selling pressure on Hourly basis on Gold. Technically, I am certain in May’s #19 Support Lower High break and continuation of Technical Bearish perspective. Taking all aspects in consideration, I expect aggressive push towards #1,827.80, if #1,860.80 - #1,858.80 Support zone breaks / that is Technical part - Fundamentally, Gold is equipped for an decline aswell on possible Yields recovery (on the Fed aftermath) as an catalyst. For now it is dangerous to engage any kind of position since I see no Short-term profitable pattern as I always look for since Gold can go both ways (I cannot rule out #1,874.80 - #1,877.80 correction as Yields are still on the downtrend without Bullish confirmation, mentioned on my yesterday's commentary). The current consolidation of Gold and DX resembles the October - November #2018 pattern before the future downward movements. My estimations for based on a Weekly basis for Gold after clearing its #2018 Annual opening displays a reasonably clear run towards Lower levels. Again, my model worked quietly well because no Fundamental interference occurred, now it is a different scenario (remember US - Iran conflict escalation and Gold reaction on it) and this new wave attracts Sellers on the market.


Fundamental analysis: Despite the stagnation on Yields, Gold is extending it’s ranged candles, showcasing the strong underlying Bearish trend. With DX Trading on indecision candles and Usd-Jpy pair on the Weekly High’s regarding E.U. opening, I am only expecting Gold to fall more under these conditions. If Gold don't break #1,858.80, it is going to be a ranged session but if it does, I may see a quite Bearish action on the aftermath. As for the Price-action, for now Gold is consolidating within #1,860’s, as expected as this structure is (by the book) Selling signal, but I cannot approach with Selling order as Gold was already almost on #30 point decline and it is unlikely to expect further takedown, at least for current sessions. The movement is within my models and my outlook is unchanged. I would like to note that the fact that Gold is consolidating on the Higher Low trendline of the Channel Down and as it is visible, it resembles the last Higher Low of the fractal, ready to turn even more downwards. This validates it even more. I will update if the Price-action does something different. More specifically with #1,840.80 as the Hourly 4 chart Support, if it breaks I am expecting an aggressive Bearish Gap fill at #1,827.80 within #3 sessions. The Daily chart turned Bearish sessions ago and can support this downtrend. This #3 sessions horizon coincides with the release of the U.S. Fundamentals, so all the parameters support a speculative downtrend on Gold amplified by a strong upswing on Bond Yields and DX.


Technical analysis: As I expected, Gold is consolidating on Daily chart after it entered my expected #1,860.80 - #1,870.70 zone with #1,877.80 as an possible Top. Upper maximum extension can reach #1,887.80 Hourly 4 chart extension if Resistance breaks. Both ways, I doubt that Bullish extension will last for long as Gold will be ready for another Bearish sequence. It is important to note that Bond Yields engaged the recovery as expected (# +1.84% with yesterday's session candle) which can extend the downtrend. I will use this configuration and observing market closing (closing below #1,877.80 constitutes the downtrend extension). DX however remains weak, adding Buying pressure on Gold counterbalancing the minor rise on Yields. This gives me the impression that Gold has at the moment more probabilities to a Short-term downtrend than break above the Resistance. Both ways, I am contemplating Selling the market (as FOMC minutes are approaching). Keep in mind that the Medium-term pattern on Daily chart is an Channel Down and Gold is on it's Lower High zone with Lower levels being a potential Lower Low target. I don't expect today's Fundamentals to have a big impact as like I've been highlighting all last week, the market will wait for important macroeconomic events before making a move. A


My position: As I am not interested in Buying on Short-term, #1,858.80 break will trigger my pending Selling order, calling for #1,827.80 extension. I will apply my strict Risk management strategy and (as I did on my yesterday's position), move my Stop-loss every #5 points in Profit, and if market reverses, my Stop-loss will be there to prevent unexpected scenarios. However, don't be surprised if you see thin Volume throughout today's session.