Gold Melting at the sight of a possible strong US dollar.
I analysed the Dollar index and for technical reasons, I believe the dollar might strengthen. Looking at Gold (XAUUSD) I've concluded the following:
1. Gold finally broke out of its ascending channel with strong bearish momentum. As breakout trader, we know the price moves in two phases (push and exhaustion) *Thanks David* and will nearly always retest a broken support or resistance level. Here we clearly see that price is retesting previous support as new resistance, which indicates that we're likely expectant of a downward move.
2. I enjoy the function of an EMA for confluence. Moving averages operate as dynamic support and resistance and when price plays under the EMA, to me it's as good as looking at it as resistance.
3. Lastly, I'm a huge fan of chart patterns. Price seems to have formed into an ascending wedge in a downtrend which signals bearish continuation as we look to take advantage of the creation of a new lower higher.
1. Gold finally broke out of its ascending channel with strong bearish momentum. As breakout trader, we know the price moves in two phases (push and exhaustion) *Thanks David* and will nearly always retest a broken support or resistance level. Here we clearly see that price is retesting previous support as new resistance, which indicates that we're likely expectant of a downward move.
2. I enjoy the function of an EMA for confluence. Moving averages operate as dynamic support and resistance and when price plays under the EMA, to me it's as good as looking at it as resistance.
3. Lastly, I'm a huge fan of chart patterns. Price seems to have formed into an ascending wedge in a downtrend which signals bearish continuation as we look to take advantage of the creation of a new lower higher.