GOLD Most Important Levels, Preparing The Week with Trading-Guru

Welcome to another in-depth breakdown of gold using technical analysis. In this analysis I will help you prepare for the following week using the chart above.

I am suggesting a long trade set-up here on XAU/USD. In general gold obviously has a long bias since it's been rising nearly non stop on the larger timeframes. But there are short opportunities on the shorter ones. Bare in mind that when you're shorting you are betting against the market (more so with gold than anywhere else). So you won't want to hold your positions for too long. Anyways, in this idea I will focus on a long position.

Let's discuss all the horizontal levels in detail:

Horizontal Resistance Zone (Level II)
This is a zone that can be used for a really optimistic exit on gold. This zone is marked by the all-time-high of gold around $2080. Be prepared for serious resistance if gold gets close to these levels.
I wouldn't suggest to hold over this level, but to exit slightly below, for instance around $2070, to maximize your win percentage.

Horizontal Resistance Zone (Level I)
This is my recommendation for an exit on a long position. The price is marked by a recent high where gold previously struggled. We have a beautiful 2.44% opportunity here, perfect for a scalp trade that should last about a day or so.

Psychological level of $2000
This level is an important one. When gold goes above this level, newspapers will start writing about it. People will have set their alerts on this level, people will have set their take profits on this level. Simply put, a lot of things might happen here.
For a slightly more safe exit, you could try to trade towards slightly below $2000, like $1999, to increase your chances of a take profit limit order to get hit.

Smaller middle yellow zone
Then we have the yellow horizontal zone. This is an area on the shorter time frames where we have seen a lot of resistance, and just before the weekend we witnessed a break-out. I expect that through an S/R flip this zone can be used for a really good long entry.
By waiting for the price to retrace a bit, we make sure we improve our risk-reward. Currently the price is a bit in the middle of nowhere, and not suitable for an entry in my view.

Horizontal Support zone (Level I)
This zone could be use for an even better long entry on gold. If the price retraces this far, you can have a fantastic risk reward when trading a reversal. Also, if you plan to enter around the yellow support, you can use this zone to set a stop-loss.

Horizontal Support zone (Level II)
This zone can be used for a stop-loss, or for a very very extremely conservative entry. Let's hope we won't see gold anywhere near $1850 anytime soon again.

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- Trading Guru

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Disclaimer!
This post does not provide financial advice. It is for educational purposes only!

Trade closed: target reached:

Hey all, I am calling this trade a win. It didn't reach the target exactly, but the overall idea was followed nicely by the price.

I just published a new idea where we can repeat this concept but on a lower level now that gold is dropping so hard. Please check it out and give it a like!