As anticipated, XAU/USD falls sharply – anyone for shorts?
As anticipated, bullion eventually pressed for lower ground on Thursday, breaking the current H4 range between 1212.5/1189.7 (houses September’s opening level at 1200.0) to the downside.
Technicians who follow multiple timeframes likely saw the break lower on the horizon. Weekly price is making firm ground beneath a key resistance level coming in at 1214.4. Further downside from this point could eventually stretch as far south as the 2017 yearly opening level at 1150.9. Daily action was also seen engaging with the underside of a nice-looking supply zone at 1221.2-1207.5. Aside from the base displaying attractive downside momentum (see pink arrow), this area could also be considered the ‘decision point’ to print 2018 yearly lows of 1160.3.
With stop-loss orders likely tripped beyond the August 24 low 1184.4 (blue arrow), and H4 price yet to challenge demand at 1176.2-1180.5, a retest play to the underside of the recently broken H4 range (1189.7) could be an option today (pink arrows).
Areas of consideration:
A retest of 1189.7 today, as discussed above, is certainly a consideration. Traders are advised to wait and see if H4 price prints a bearish candlestick formation (stops and entry dictated by this structure) at the retest before considering a position short, since this will help avoid falling victim to fakeouts. The first take-profit target in view is the H4 demand base mentioned above at 1176.2-1180.5.
Technicians who follow multiple timeframes likely saw the break lower on the horizon. Weekly price is making firm ground beneath a key resistance level coming in at 1214.4. Further downside from this point could eventually stretch as far south as the 2017 yearly opening level at 1150.9. Daily action was also seen engaging with the underside of a nice-looking supply zone at 1221.2-1207.5. Aside from the base displaying attractive downside momentum (see pink arrow), this area could also be considered the ‘decision point’ to print 2018 yearly lows of 1160.3.
With stop-loss orders likely tripped beyond the August 24 low 1184.4 (blue arrow), and H4 price yet to challenge demand at 1176.2-1180.5, a retest play to the underside of the recently broken H4 range (1189.7) could be an option today (pink arrows).
Areas of consideration:
A retest of 1189.7 today, as discussed above, is certainly a consideration. Traders are advised to wait and see if H4 price prints a bearish candlestick formation (stops and entry dictated by this structure) at the retest before considering a position short, since this will help avoid falling victim to fakeouts. The first take-profit target in view is the H4 demand base mentioned above at 1176.2-1180.5.
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