Recovery near completion / Gold is eyeing Lower levels

4 de out. de 2021

Gold''s general commentary: Gold was on a strong rebound after Thursday's session Support rejection as U.S. session opening Bell was approaching (PCE aswell), and was within Bearish territory and even though the recovery is strongly limited, I should be cautious with entry and Stop-loss selection on my next position (as Gold unexpectedly extended last week’s recovery, backed up by no firm reason for almost #37 point uptrend). It appears that Investors await for clear #1,745.80 break confirmation (and Highly important macro-economic announcement: U.S. NFP numbers) later on throughout this week, as discussed regarding revealing major move. Market sentiment is adding to a decline with DX on red candles, which should (and currently is) applying Buying pressure on Gold. However Technically, the Hourly 4 chart’s #1,778.80 is still keeping Gold Bearish on Short-term, which so far hasn't been tested. If DX stays on the same configuration, most likely it will stall the downtrend on Gold, but slight Bond Yields Bullish Gap fill will provide me additional Selling entry towards #1,727.80 or even less. I am not interested in Buying at least for #2 Months more, regarding Medium-term. Right now I do not have any other options but to protect the equity with tight Stop-losses. You have the option of not Trading this anymore aswell. I firmly believe that Gold will engage aggressive takedown early on current week, which was postponed by miraculous recovery on Gold (lately), which occurred (at least to myself) as an huge surprise candles. I cannot approach current mixed signals on Gold without breakout points. I will Sell on spot only if #1,745.80 configuration breaks. I am expecting #1,700.80 test throughout this week.


Technical analysis: Gold manages to keep the High levels despite the stabilization on Bond Yields market and very sharp drop on DX, as both DX and the Bond Yields Sell-off provide Resistance and new Selling messenger. Especially the fact that the Bond Yields broken the Lower Support on Hourly 4 chart’s Channel Up, makes Gold switch from Bearish to Neutral on the Short-term, with it's own Hourly 1 chart having regained complete Neutral status for the first time since September #2. This side Swings that I am witnessing are consolidation candles. Furthest line of the rise is #1,778.80 (Daily chart’s Resistance zone), if broken, could result as an uptrend extension with a Top above #1,800.80 psychological barrier (less likely). As long as that line is intact, Top Selling strategy is favoured, where every rise represents Selling opportunity. However, on the other side aswell / every Support rejection, Gold will have visible Buying pressure and accumulation. As soon as the new market dynamics, post Fed, find their prior balance, Gold can resume its steady Medium-term downtrend. As you understand Trading Gold is a quite complex asset to deal with but done right can provide steady base of income. Constant monitoring is required as well as checking how the Price-action behaved in the past when similar patterns formed (on this instance what did Gold react to a joint decline on Bond Yields and DX but not on Usd-Jpy), and Golden rule to follow and to Trade by is that Gold always repeats it’s cycles (historical resemblance). Keep in mind that my approach is swing Trading (Medium-term positions) within quarterly cycles and my goal is identifying the correct trend for a longer period of time, even if it lags to a small extent. Usd-Jpy pair regained full correlation (can be added to correlations list), since October and November are Months where Usd-Jpy currency pair is back on radar.


My position: As I am Highly sceptical and have strong reservations regarding recovery continuation on Gold, I am not interested in Buying Gold. Since correlating assets are not working in my favour, I will wait for full confirmation below #1,745.80 Support zone to continue Selling Gold. I well preserved my capital continue my winning streak, but current market sentiment offers me no patterns to Trade by.