In today's analysis, our focus turns to XAUUSD (Gold) on the Daily chart. As previously noted, our anticipation of a sharp decline in GOLD from the 1949-1952 levels has played out as expected. Now, we are examining our targets for our existing short position and exploring the possibility of opening a long position.
Drawing insights from historical data over the past few years, we have observed that gold tends to follow recurring patterns and has a penchant for retracing to the 61.8% Fibonacci retracement level. An illustrative instance of this behavior is the 1952 level observed on the 4-hour chart. Currently, our attention is drawn to the potential 61.8% retracement on the Daily chart, anticipated at around 1786 levels, with an expected arrival time around mid to late October.
The historical data further indicates that November and December often exhibit a bullish tendency in the gold market. Aligning this pattern with our Daily chart channel analysis, we find a compelling convergence with the 61.8% Fibonacci retracement, signifying robust support during this period.
It's worth noting that November is historically a month when the Japanese Yen tends to shine, and, interestingly, gold frequently moves inversely to the Japanese Yen. Examining higher time frames reinforces our belief that this could present an opportune moment for acquiring gold.
Adding another layer to our analysis, we look at the economic calendar and note that on the 31st of October, the Bank of Japan (BOJ) is expected to make an interest rate decision that may surprise the market. This potential surprise from BOJ aligns with our expectation of Yen strengthening, possibly driving capital towards gold as a safe-haven asset.
However, please bear in mind that our approach to risk management may differ from your personal risk tolerance. Therefore, this analysis should not be taken as a trading recommendation. It reflects our perspective on the market's likely trajectory, which could evolve over time, given that we still have approximately 1.5 months to observe market developments. Stay vigilant and adapt your strategies as needed.
Drawing insights from historical data over the past few years, we have observed that gold tends to follow recurring patterns and has a penchant for retracing to the 61.8% Fibonacci retracement level. An illustrative instance of this behavior is the 1952 level observed on the 4-hour chart. Currently, our attention is drawn to the potential 61.8% retracement on the Daily chart, anticipated at around 1786 levels, with an expected arrival time around mid to late October.
The historical data further indicates that November and December often exhibit a bullish tendency in the gold market. Aligning this pattern with our Daily chart channel analysis, we find a compelling convergence with the 61.8% Fibonacci retracement, signifying robust support during this period.
It's worth noting that November is historically a month when the Japanese Yen tends to shine, and, interestingly, gold frequently moves inversely to the Japanese Yen. Examining higher time frames reinforces our belief that this could present an opportune moment for acquiring gold.
Adding another layer to our analysis, we look at the economic calendar and note that on the 31st of October, the Bank of Japan (BOJ) is expected to make an interest rate decision that may surprise the market. This potential surprise from BOJ aligns with our expectation of Yen strengthening, possibly driving capital towards gold as a safe-haven asset.
However, please bear in mind that our approach to risk management may differ from your personal risk tolerance. Therefore, this analysis should not be taken as a trading recommendation. It reflects our perspective on the market's likely trajectory, which could evolve over time, given that we still have approximately 1.5 months to observe market developments. Stay vigilant and adapt your strategies as needed.