Mihai_Iacob

Gold- I'm looking to sell in key resistance

Short
OANDA:XAUUSD   Gold Spot / U.S. Dollar
In my yesterday's commentary, I said that Gold could rise and reach key 1680 zone resistance and, indeed, after the time of posting, the price rose 200 pips and reached an intraday high at 1675. After this rise Gold started to roll back down and closed the day around 1665.
My outlook remains the same and I favor a resumption of the downtrend after the tough of this important zone.

A look at the H1 chart:


As we can see from the chart above, the price is contained in a triangle since yesterday and is about to break up.
However, the rise from the low is corrective in nature and does not have an impulse with the overall idea that rallies are sold.
A break of this triangle would expose my sell zone and, considering that triangles are termination patterns, adds to my bearish outlook after the touch of resistance.

Also, looking at Gold as an asset, we can see that in both Eur and Gbp's cases Gold has broken support suggesting that the recent rise for XauUsd is more about Usd weakness than demand for Gold.

XauEur chart:


XauGbp chart:


Of course, I can be wrong, that's why, in the eventuality of opening a short position, a protective SL will be set above 1700.





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