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Gold H4(4 Hours) Chart Analysis – Key Resistance Zone, Bearish Convergence, ADX Indicator
On the H4 chart, the price which was moving higher has reached a key resistance zone formed by the 100% (1859.36) Fibonacci expansion level of the first wave, respected it and has bounced lower from this zone. Also, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 1847.85 and the second high that has formed at 1853.81 based on the MACD indicator. The price then moved lower and broke below the last low at 1828.48 creating lower lows, thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So based on all this, until the key resistance zone shown in the image below (marked in red) holds I expect the price to move lower further after pullbacks.
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
