Easy Trading Setup For GOLD (XAU/USD)
Hi Traders,
Happy Monday.
Today we are looking at GOLD (XAU/USD)
We are on the 4-hour time frame. I am noticing that the price is bouncing nicely between two zones of support and resistance. We are also seeing giant wicks on either side indicating that there is indecision in the market. The bulls are trying to come back in but the bears won't let them.
This causes the price to stay in between two tight zones and consolidate.
We also see that volume has been slowly decreasing and sloping down as time goes on. This too, indicates that this market is tired at this point. Indecision is strong and people are waiting to see which way the price will pop.
We have two possibilities.
Possibility 1 )
I would like to see the price bounce up and close above the resistance zone above. I would then like to see strong volume accompany this strong move upwards. If we see this play out, I would then look for a retrace back into the yellow resistance zone before opening up a long position with my targets being where the previous price structure was which is around the 1771 price point. Some further confluence that can help validate and give confidence to this particular possible setup, is that we have an imbalance on the left-hand side. We have a gap between 1752 and 1760 and the price needs to fill this gap. Inbalance in the markets usually does get filled. Whether this is a self-fulfilling prophecy is a topic for another day, however, this gives us further confluence to help validate the possibility of price breaking to the upside and heading higher.
Possibility 2)
If the price moves impulsively down and breaks and closes below the support zone, then I would look for high bearish volume to accompany this move. Once we see the break and close, I would then wait for the price to retrace back into the support zone before opening up a short position.
My target for a short position would be around the 1679 price point which lines up nicely with previous daily support.
These support points have been respected nicely on the daily time frame for some time however, they are giant wicks which tells me that there are many buy orders in that 1679 price level.
So whichever way the price decides to move will dictate to us if we should be bullish or bearish in this time frame and whether we will be opening up a long or short position.
Remember, as I am a swing trader, I always stay patient and I only enter into positions that present a viable opportunity to make profits. And on that note, I bid you all a fantastic rest of your Monday and as always, I will be seeing you all in the next one.
The Vortex Trader
Happy Monday.
Today we are looking at GOLD (XAU/USD)
We are on the 4-hour time frame. I am noticing that the price is bouncing nicely between two zones of support and resistance. We are also seeing giant wicks on either side indicating that there is indecision in the market. The bulls are trying to come back in but the bears won't let them.
This causes the price to stay in between two tight zones and consolidate.
We also see that volume has been slowly decreasing and sloping down as time goes on. This too, indicates that this market is tired at this point. Indecision is strong and people are waiting to see which way the price will pop.
We have two possibilities.
Possibility 1 )
I would like to see the price bounce up and close above the resistance zone above. I would then like to see strong volume accompany this strong move upwards. If we see this play out, I would then look for a retrace back into the yellow resistance zone before opening up a long position with my targets being where the previous price structure was which is around the 1771 price point. Some further confluence that can help validate and give confidence to this particular possible setup, is that we have an imbalance on the left-hand side. We have a gap between 1752 and 1760 and the price needs to fill this gap. Inbalance in the markets usually does get filled. Whether this is a self-fulfilling prophecy is a topic for another day, however, this gives us further confluence to help validate the possibility of price breaking to the upside and heading higher.
Possibility 2)
If the price moves impulsively down and breaks and closes below the support zone, then I would look for high bearish volume to accompany this move. Once we see the break and close, I would then wait for the price to retrace back into the support zone before opening up a short position.
My target for a short position would be around the 1679 price point which lines up nicely with previous daily support.
These support points have been respected nicely on the daily time frame for some time however, they are giant wicks which tells me that there are many buy orders in that 1679 price level.
So whichever way the price decides to move will dictate to us if we should be bullish or bearish in this time frame and whether we will be opening up a long or short position.
Remember, as I am a swing trader, I always stay patient and I only enter into positions that present a viable opportunity to make profits. And on that note, I bid you all a fantastic rest of your Monday and as always, I will be seeing you all in the next one.
The Vortex Trader