Gold: How to Trade

The price moved downward, following the bearish signals from the daily and the 4H timeframes. You can read more about them in the related ideas.

Now let's try to understand the further market movements and how we can use them.

The price broke 1558.00 support level and the local uptrend line. It gave us another strong bearish signal. The market started the correction movement, and it has room for the downward movement. Also, the market does not have strong fundamental support right now, and it helps sellers to push the price down. I think the price can move back to 1500.00 support, bounce from MAs and the main uptrend line, and try to reach the high at 1612.00 one more time. The reversal signals from this zone will be good for buying.

The price can also try to move back above 1558.00 and move higher. RSI is going to confirm the price reversal. MACD histogram dropped below the signal level, and it can give a reversal signal. The price can try to break the resistance zone formed by the uptrend line and 1558.00 resistance level. If this attempt does not successful, it will give us another bearish signal and a possible sell opportunity with stops above 1558.00 resistance. If the price breaks this resistance zone, it won't be a good buy signal, but the market will be able to move to 1612.00 one more time. I don't think the market will succeed with this plan, but we have to take into consideration even such movements.

If we talk about trading, I think there are only two possible trade opportunities we should follow. The price reversal from 1588.00 with stops above it. And the buy opportunity from 1500.00 and MAs with stops below the local swing lows.

If you have another trading plan, please share in comments!