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GOLD has recently tested a high volume level of support and is showing signs of a bullish impulse phase forming.
The USD seasonally is weak for another week and could see GOLD have one more rally.
Watch the video to find out more…
Today we’re taking a look at Gold (XAU) as we could see another impulse move form.
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XAU had a double-bottom form while the price rallied from key levels recently. Typically, the price would go down and retest that structure.
The price also made higher highs. When that happens, we have to look for the continuation of that trend.
XAU has been making higher highs on the daily timeframe after forming a double bottom. The price that had sellers was at $1800.00. This will be an area of interest for targets after being a supply area.
The USD is still seasonally bearish for another week which could see XAU have one final move higher.
Four-hour timeframe
I was looking for XAU to come back a little bit deeper. However, going down into the four-hour timeframe, the price has recently found support at the high volume level of 1763.
Usually, when the market is in an impulse phase, the four-hour timeframe would be making higher highs and higher lows.
In the four-hour timeframe, we can see that the price is respecting the trend by finding support at previous highs. Within the last retracement phase, the most traded level at $1763.94 was held as support. This adds further confluence to another impulse move higher.
The price pulled back into a previous structure point, went to a high volume level, and rallied.
If we were expecting a continuation of the impulse phase, perhaps up to $1800, could we look for long opportunities?
I’m focusing on the consolidation pattern at the moment.
I would like to see the consolidation break to the upside because 1770.64 is the most traded level within this zone.
The four-hour timeframe shows us that the price is consolidating above the recent high volume level. If the price were to trade higher, we need to see two successful candle closes above the highs of the zone. This would confirm the breakout and present an opportunity to trade from $1770.64 – the most traded level within the consolidation.
But first, I need the price to close above 1770.64.
If we get two confirmed candles closing above that level, I’ll be looking to buy between the 1770 or 1780 levels.
There’s a lot of selling pressure in this candlestick, so this would be the target for long positions if ever we get a successful breakout.
XAU has good potential this week. If you’re still on the fence about buying, you can give it a try at no-risk with a free demo trading account by clicking here.
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