The price of Gold has been consolidating for some time now but showing characteristics of a bullish move. Will the price break out long?
Watch the video to learn more…
GOLD- Daily Timeframe Trend
The daily time frame trend on Gold suggests that a bullish move is likely due to the formation of higher highs and higher lows.
The price has also re-tested the previous structure highs which can often act as support adding confluence to a move higher. However, the USD recent bullishness could bring a stop to the move unless we see a dovish tone from the Federal Reserve in their next meeting this evening.
This meeting will add volatility to the markets and will dictate the direction of the price of the USD which will have a knock on affect to the price of GOLD.
FOREX Market Trend Analysis
When the daily time frame trend is bullish and the price is in an impulse phase we will see an uptrend on the 4hr timeframe.
This is shown in the image here, the yellow like in the daily time frame impulse phase and the blue arrows highlight the 4hr trend within it.
As you can see the 4hr trend will form higher highs and higher lows offering many trading opportunities.
This also works for the retracement phase in a daily time frame bullish trend. If the price is retracing back to a support area we should see a downtrend on the 4hr timeframe.
We want to be able to trade the daily impulse phase and to do this we can wait for the 4hr to resume a bullish uptrend as this should show us the impulse phase beginning.
The Breakout Opportunity
In conclusion, if the price of Gold was to breakout of the current 4hr trading range it will be a strong indication that the price could move higher in line with the overall bullish outlook.
However, if the USD gains strength from the upcoming Fed monetary policy meeting, we could see a break to the lows of the range and a reversal opportunity.
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