Gold 4-Hour Channel Breakout With Double Top Confluence

Our 4-Hour channel from a few days ago has quickly broken to the downside.
We were waiting and expecting this to happen at some point; as we can see, we had complete divergence on the MacD and the RSI.

Fundamentally, this drop was helped by the US Dollar Strengthening and the Federal Reserve Signalling that Interest Rate Hikes will be starting in March.

There’s the famous saying, ‘Show me the charts, and I’ll tell you the news.’

Nevertheless, the price has dropped, and now we can see that we potentially have a setup forming should all our factors be met.

If we were trading this as a broken channel, we would wait for the price to retrace to the bottom of the channel and enter a short position then. Our Target would be around the 1789 Price mark, which is also previous support and the low end of the channel’s beginning where the pattern began forming.

If we were trading this as a Double Top, we would wait for the price to retrace to the neck zone highlighted in yellow. We would then enter there and open a short position.

Notice how the entry would be the same as the Broken Channel setup.

One Other Piece of confluence ( shown by the little arrows on the jagged line ) is resistance, flipped support, and now breaking through to be flipped resistance again? And this is precisely where our entry would be using the previous two possible setups? Interesting.

CAUTION! - Adding to both these setups is the giant volume bar we had with the breakout candle.
Things we have to beware of when we see this – Traps. This could very well end up being a bear trap. People see massive bearish volume, and they instantly sell. Remember, there is no point Fomo-ing into any trades. We want to make sure our analysis is as thorough as can be.

This is why we will wait for a retrace, and we will then re-access and see if we find any reason not to be short.

However, for now, both these setups seem to be pointing to shorting gold individually and together.
So for those that enjoy Swinging in the 4-hour, this might be something that interests you.
I will be keeping tabs on this and watching how it plays out.