The price of #GOLD dropped in line with the stock markets recently and could continue lower as price forms a bearish trend. But can we trade back to the resistance before looking for the trend opportunities?
Watch the video to learn more…
The daily chart on Gold is showing signs of a potential retracement phase in a down trending market. The price recently retested the major swing highs and formed a new lower low as we outlined in the previous video here.
Now the price is forming lower lows and lower highs from a technical point of view we can assume the market is in a downward trend and that we should look for short opportunities on a rally back to the resistance.
The previous lows and resistance of $1780.00 could be an area we can look to target for those swing trading opportunities. If this is where we want to be short we can look for short term trading opportunities back to these lows on a lower time.
The recent daily price action has formed a false breakout candlestick pattern. This forms when there is a large move followed by an inside candle followed by a break of the low or high depending on the direction of the market and close back within the inside candles range. These types of patterns don’t happen too often and can lead to a reversal set up.
If the price breaks and holds above the daily highs we can look for reversal trades back to the lows.
Trading Time Frame
If the price breaks above the 4hr highs we can look for a retest and bullish price action. If the daily time frame is in a downward trend but in a retracement phase we should see the market form a small upward trend on the 4hr time frame. This can offer short term long opportunities to the resistance levels.
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