From the chart above it can be seen that Gold has shown positive signs in the recent weeks, mainly due to the global equities sell-off. It looks like the recent price action has formed an ascending triangle, which usually, means a continuation of the bullish trend. Furthermore, the up-trend prevails on the RSI as well, but it is slowly approaching overbought territory, especially on the daily chart where RSI is currently at 66%.
From the other side, RSI shows a symmetrical triangle, which indicates that there is a probability that the break can occur on the downside as well. Alongside with unwillingness of the price to break the 1240 and a potentially triple top around that level, we could see a bearish movement.
As a result, we should monitor the price action in the next 2-3 trading days in order to get the confirmation for this trade.
The idea is to trade the break of the triangle:
- For the long trade, a buy order can be placed 1 pip above the 1240 level, with the SL below the recent low.
- For the short trade, the short-term uptrend line should be broken with a 4h candle time filter confirmation, SL 1 pip above 1240 level. A break of the 50d EMA will further confirm the change of the bullish trend.
Watch for the break of the symmetrical triangle on the RSI to get further confirmation.
From the other side, RSI shows a symmetrical triangle, which indicates that there is a probability that the break can occur on the downside as well. Alongside with unwillingness of the price to break the 1240 and a potentially triple top around that level, we could see a bearish movement.
As a result, we should monitor the price action in the next 2-3 trading days in order to get the confirmation for this trade.
The idea is to trade the break of the triangle:
- For the long trade, a buy order can be placed 1 pip above the 1240 level, with the SL below the recent low.
- For the short trade, the short-term uptrend line should be broken with a 4h candle time filter confirmation, SL 1 pip above 1240 level. A break of the 50d EMA will further confirm the change of the bullish trend.
Watch for the break of the symmetrical triangle on the RSI to get further confirmation.
Trade active:
Despite the fact that there was a false break up, did not open the buy trade as my strategy always uses a 1 candle time filter, should have mentioned it. Never the less have opened a short trade on the break of the downside of the triangle.
Trade closed: target reached
