Gold: Due for a Correctional Bounce?

FX:XAUUSD   Gold/U.S. Dollar
1207 27 28
Update: That trade failed. Breaking 1240.00

Gold             is trading near the bottom of a clear short term bearish channel , where Oversold conditions, bullish divergence on RSI and the Short term channel support hint a potential upside pullback for now.
The pullback scenario requires 1240.00 major support to hold. And targets the mid-channel resistance around 1275.00 level.

1240.00 is a key support level to watch.

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it seem like the channel got broken already around 10 bars ago on that bigger red bar :)
then it got retested and then we continued down. actually not quite the best spot for a long trade but you always notice in hindsight first ^^
here a little helicopter view for the next year :D
Now it broke the trendline and lost further.

If this week, FED is more hawkish,Gold could down more and more.

Failed setup, I closed the trade at 1230.00 with a noticeable loss.
LuigiZeroZero Technician
It's good of you to share your insights, especially when you're wagering real money. Thanks.
Your set up is a good one but as it's a reversal rather than continuation set up, I would buffer more time and margin as the set up takes time to unfold. If I'm tight on time or margin I would go for easy kill like long ES.
For me, I turn to USD as the ultimate indicator. Interestingly, this week DX will close on record high volume on an eight week high. Distribution has been going on for awhile but this one is ultra high volume which is climatic buying by retail investors. I look at the other currency and metal, I see professional buying as they're high volume on downbars.
The reversal might not happen the next day, but your observation is right on.
LuigiZeroZero LuigiZeroZero
As I typed, ES seems to be confirming a top reversal as well. So what used to be long DX long ES short everything else will likely reverse?
Technician TOP LuigiZeroZero
Not sure what ES symbol refers to?
LuigiZeroZero Technician
ES is E-mini S&P where I come from. Sorry I forgot different exchanges have different symbols.
Technician TOP LuigiZeroZero
Ur right, i should have waited for more confirmation as well.
LudmilaHanania Technician
The short precious metals trade is becoming a very easy trade, where all are confident and sure of much lower prices , maybe a vicious rally is too close.
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