Gold Breaking Through Major Support 1680
What a time to live and see in financial markets. XAUUSD has entered a major downtrend extension breaking lower than a 122 weeks support and a major reversal 115 weeks Darvas box (Both occurred at the weekly candle breaking low from 1680). The real bearish cycle begins now! I personally have been selling from the retest of 1990-2000 zone which was around 0.618 of the monthly shooting star retracement from the month of March 2022 and also the large bearish bat pattern. But now the trend has broken even further low. Target zones in sight are marked in the chart, they are the only consecutive next support regions I could find.
The evidence to my claim for a continued bearish cycle for gold are as follow:
1- We have just broken lower than the major long time Darvas box with a strong bearish weekly candle at 1680
2- The bearish channel from early April is still intact
3- The break and retest of 1680 has already occurred on daily timeframe during the latest week (Break and retest method)
4- At this point, we are having a "h pattern" (one after the other continuation) that we see when a trending market is hitting previous lows to produce a new low every time, usually when it bounces from previous low, we have double bottoms but it has not so we will consider it an attempt to make a new low
5- The Federal Reserve is about to announce a new interest rate hike on this coming Wednesday (21 Sep, 2022) which will aid the continued strength of the USD which will push metals further lower
6- Although I don't really care about this one but the sentiment of the market is strong bearish
This analysis is invalid, although unlikely, but if:
1- We manage to break higher than the bearish channel and also the 1680 support come resistance zone (to be precise the exact price level is 1740)
2- The Federal Reserve takes back their decision on interest rate hike (we are likely to break higher if that happens although it is impossible to happen because all of the work feds been doing for the last 6 months would turn to dust)
Suggestions to traders:
1- I would recommend you guys to wait for at least one H4 reversal bearish candle if not daily to continue with short positions here
2- If you want to have an idea about the stop loss, it is the previous monthly low at 1712 but lets us just make 1720 to compensate for spikes if we ever reach that point. Although I would recommend 1740 for this one for sure. But since we have broken and retested 1680, there are less chances we might see the stop loss price levels anytime soon.
3- If we see a gap up and gold opens above 1680 on Monday we will not consider it a weekly confirmation to break low so you might wanna wait to consider this analysis and we might see 1712-20 again possibly 1740 retested (if that does not happen just ignore this clause) Just to be extra careful :-)
4- if the bearish channel remains intact for future, you might have an idea about the dates between which you should expect lower target zones (It may sound like magic but trust me it is just maths and analysis)
5- if you want to take note of possible retracement levels see related idea, it is already too much on the chart I could not add anything further so it is better to just tag the idea with this idea
Take extra care of you capital, trade safe, ensure proper risk management and happy trading :-)
The evidence to my claim for a continued bearish cycle for gold are as follow:
1- We have just broken lower than the major long time Darvas box with a strong bearish weekly candle at 1680
2- The bearish channel from early April is still intact
3- The break and retest of 1680 has already occurred on daily timeframe during the latest week (Break and retest method)
4- At this point, we are having a "h pattern" (one after the other continuation) that we see when a trending market is hitting previous lows to produce a new low every time, usually when it bounces from previous low, we have double bottoms but it has not so we will consider it an attempt to make a new low
5- The Federal Reserve is about to announce a new interest rate hike on this coming Wednesday (21 Sep, 2022) which will aid the continued strength of the USD which will push metals further lower
6- Although I don't really care about this one but the sentiment of the market is strong bearish
This analysis is invalid, although unlikely, but if:
1- We manage to break higher than the bearish channel and also the 1680 support come resistance zone (to be precise the exact price level is 1740)
2- The Federal Reserve takes back their decision on interest rate hike (we are likely to break higher if that happens although it is impossible to happen because all of the work feds been doing for the last 6 months would turn to dust)
Suggestions to traders:
1- I would recommend you guys to wait for at least one H4 reversal bearish candle if not daily to continue with short positions here
2- If you want to have an idea about the stop loss, it is the previous monthly low at 1712 but lets us just make 1720 to compensate for spikes if we ever reach that point. Although I would recommend 1740 for this one for sure. But since we have broken and retested 1680, there are less chances we might see the stop loss price levels anytime soon.
3- If we see a gap up and gold opens above 1680 on Monday we will not consider it a weekly confirmation to break low so you might wanna wait to consider this analysis and we might see 1712-20 again possibly 1740 retested (if that does not happen just ignore this clause) Just to be extra careful :-)
4- if the bearish channel remains intact for future, you might have an idea about the dates between which you should expect lower target zones (It may sound like magic but trust me it is just maths and analysis)
5- if you want to take note of possible retracement levels see related idea, it is already too much on the chart I could not add anything further so it is better to just tag the idea with this idea
Take extra care of you capital, trade safe, ensure proper risk management and happy trading :-)
Comment:
We are having a Pennant (Continuation Pattern) on H4, perhaps a break low from 1661 is our way in to the next possible immediate target between 1625-35. At this price range we can expect a little correction before breaking low further.
Comment:
To understand this idea update please see my recent local level idea about the retracement of bullish secondary trend:
We need at least a H4 closing below 1614 to expect the recent low at 1614 retested and possibly broken. Breaking 1614, we shall possibly be heading to test the lower border price range of the bearish channel between 1525-1560. Best of Luck!
