XAUUSD - Short Trading Idea on the Weekly Chart.
Introduction:
Please read the full post before considering taking action.
On these charts we are definitely looking at the big picture here. Once we zoom out to the weekly timeframe, we can see a clear pennant formation narrowing its price range. Since that's a continuation pattern and the previous move was a bearish one, we believe it to be more likely for gold do go down than to break the structure and risk a move upwards. It presents us with the best risk-reward ratio.
However, one should always keep in mind that markets are, for the past couple of months, behaving erratically, meaning that, while we try to identify actionable price zones, one piece of news can disrupt the whole scenario. Trade wars and economic uncertainty have always been bullish for gold and we are in such a situation. A "safe" bet on longing XAUUSD is perfectably reasonable, even at this price, as CHF and JPY are still signalling a risk-off scenario.
How to Proceed:
Our positions here are very small, since we took this to the weekly timeframe. We are keeping a short we opened at 1348 and will open more should bearish momentum install itself. Keep in mind that gold shorts pay positive swaps so, if you can size your bet appropriately and are prepared to hold these positions for long enough, you can increase your profit amount by a good margin;
Take Profit:
Our take profits will be dynamically evaluted as the trade unfolds. It's too soon to tell.
Side-notes:
Remember that a trader's default position is doing nothing! We plan our trades weeks ahead and watch markets closely to ensure the best risk reward available.
Please leave your comments below to inspire us to continue our work and don't forget to follow us! Feel free to send us a direct message with any doubts you might have and experience a great trading session!
Please read the full post before considering taking action.
On these charts we are definitely looking at the big picture here. Once we zoom out to the weekly timeframe, we can see a clear pennant formation narrowing its price range. Since that's a continuation pattern and the previous move was a bearish one, we believe it to be more likely for gold do go down than to break the structure and risk a move upwards. It presents us with the best risk-reward ratio.
However, one should always keep in mind that markets are, for the past couple of months, behaving erratically, meaning that, while we try to identify actionable price zones, one piece of news can disrupt the whole scenario. Trade wars and economic uncertainty have always been bullish for gold and we are in such a situation. A "safe" bet on longing XAUUSD is perfectably reasonable, even at this price, as CHF and JPY are still signalling a risk-off scenario.
How to Proceed:
Our positions here are very small, since we took this to the weekly timeframe. We are keeping a short we opened at 1348 and will open more should bearish momentum install itself. Keep in mind that gold shorts pay positive swaps so, if you can size your bet appropriately and are prepared to hold these positions for long enough, you can increase your profit amount by a good margin;
Take Profit:
Our take profits will be dynamically evaluted as the trade unfolds. It's too soon to tell.
Side-notes:
Remember that a trader's default position is doing nothing! We plan our trades weeks ahead and watch markets closely to ensure the best risk reward available.
Please leave your comments below to inspire us to continue our work and don't forget to follow us! Feel free to send us a direct message with any doubts you might have and experience a great trading session!