Gold - An interesting set up into the Fed rate hike cycle

FX:XAUUSD   Gold Spot / U.S. Dollar
1. After drifting within the main falling price channel , Gold             took a steep downturn to form another steep but minor price channel
2. Gold             broke out from this minor channel and in the process of retesting the break out level formed an inverse H&S pattern which gives minimum measured move to 1161.56 (161.8% Fib) and 1174.93 (final measured tgt             ).
3. The neckline of the inverse H&S coincides with the breakout of the main falling price channel (and also marks a new rising channel )
4. Expecting to see a dip to 1140 neckline ahead of a rally to 1161/1174 region
5. 1225/1217 marks a Stoch divergence where the low of August 5th failed to confirm thus forming a higher low in stochs.

Watch 1161 region which could see a retest for support when prices break the resistance. Refer to the monthly chart below in the comments section on the larger time frame.

Trade management will be key to trading this set up. Ideally by the time price hits 1160, looking to book some profits and trading the remainder at BE. Currently, the expectations of Gold             hitting 1220 region is not that high, but with a Break even/risk free trade it is worth exploring.

Another analysis completely different but points to the same bias, from Ivan
Pitchfork, head and shoulders, basic channel plus candlestick reading - chart basics produce bullish scenario in contrast to more sophisticated models going short. Interesting challenge here.
Monthly Gold chart. Divergence + Bullish harami/inside bar, upside break out looks more likely. So 1140 is the level to watch for a potential break above 1174 to target +1200 levels.
themarketzone justatrader
Agree with the bullish bias on metals, but still it'll be interesting to see how it will deal with the trading channel top.
+1 Reply
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