not a valid head and shoulders

FX_IDC:XAUUSD   Gold Spot / U.S. Dollar
55 1 1
Gold             rallied unexpectedly on Thursday, while all majors were retracing. Many traders might see the H&S and are very bearish biased Gold             , but I want to warn you. In my experience and according to some sources on the Internet, this is not genuine pattern. Why? The neck line of the right shoulder is lower than the one on the left. You might take into te account the downward sloping channel, which makes sense, yet IMO             I would just be buying the demand zones. I will turn bearish gold             on three reasons:
  • 1993 has to be taken out.
  • 111.80 sh U/J is taken out. Why the yen? Well just look the correlation from the past decades between gold             and U/J and you will see why.

so be patient and try to position your self safely before FOMC on Thursday...

Comment: As you see it was not a H&S. So what to do? We have the maybe biggest event in history of Europe. Markets will take care of themselves. I think the Brits will vote for Brestay, no matter if they voted for or against. It is all about who counts the votes. How to trade gold? From now until the 23rd we have to be prepared for volatility due to news concerning the vote. As we all saw, most of the majors rallied during Asia, which shows how the Algos are in control. If you do not have access to the real time Data from Reuters for example and you do not have the proper equipment and algorithms to execute orders in milliseconds, then you will get very frustrated to see the hundreds of pips going away in front of you. So sit tight and play some chill out music.
So , I suppose if we get Brestay gold will be slammed down to 1240sh. From there I will be looking to buy due to the main fundamental driver, which is bearish USD. If we get Brexit then the sky is the limit. In case you wanna position yourself for Brexit event, buy within the demand zone at 1275sh.

what about the EURUSD correlation?
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