Last week was an interesting one for Gold traders.
After a strong reversal from medium-term trend line support, XauUsd managed to break back above 1955 important support and also broke above the falling trend line started at the beginning of May, all suggesting a reversal to the upside.
However, on Friday, following NFP data, bears totally took control leaving an immense bearish engulfing on our daily chart exactly from the 1980 resistance.
This bearish engulfing is important for 3 reasons:
1. The pattern is exactly in a very important resistance that now becomes a strong ceiling for the price
2. This reversal puts the price back both under the falling trend line and horizontal 1955 support. Such a false break more often than not leads to continuation.
3. The daily close of the pattern is exactly in the medium-term trend line's zone support, putting pressure for a break.
That being said, my outlook for Gold in the medium term changed to bearish and I'm waiting for further price development for confirmation of short trades.
After a strong reversal from medium-term trend line support, XauUsd managed to break back above 1955 important support and also broke above the falling trend line started at the beginning of May, all suggesting a reversal to the upside.
However, on Friday, following NFP data, bears totally took control leaving an immense bearish engulfing on our daily chart exactly from the 1980 resistance.
This bearish engulfing is important for 3 reasons:
1. The pattern is exactly in a very important resistance that now becomes a strong ceiling for the price
2. This reversal puts the price back both under the falling trend line and horizontal 1955 support. Such a false break more often than not leads to continuation.
3. The daily close of the pattern is exactly in the medium-term trend line's zone support, putting pressure for a break.
That being said, my outlook for Gold in the medium term changed to bearish and I'm waiting for further price development for confirmation of short trades.
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As I said in the morning, Gold looks like is changing medium-term trend and a break under the trend line is unavoidable.
Looking at the 30m chart we could see that the price is trading exactly in the horizontal level, and this also could fall soon.
Sell rallies under 1950 resistance could be a good strategy