Last week we went long gold at 1295 targeting the formation of a head and shoulder pattern around 1301. Four days later and we see that right hand shoulder pattern forming and therefore look to short gold at market level.
If you look at our chart work on the uk trading view website you can see four failed attempts on 4 hourly charts to breach 1304.8 area before pulling back. We are looking for the market to once again pull back from this area and head lower to the upward tilting neckline of the head and shoulder pattern. An area around 1296 is where we will look to exit the trade.
In addition to the pattern formation and failure to reach last weeks right shoulder high of 1306.4 we have seen the formation of a bearish engulfing candle on the hourly timeframe.
Trade closed manually
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Gold traded down past our take profit 1 at 1302 into early evening before heading higher overnight and closing at no cost back at our entry price.