Hi Traders! Today I share with you my Gold technical analysis and short term forecast post, we do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe technical analysis on Gold in order to find possible trading opportunities. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis now from the highest timeframe which will be the daily chart here.
Gold D1(Daily) Chart Analysis – Key Resistance Zone, Potential Bearish Divergence, Stochastic Oscillator
On the daily chart the price which is moving higher has reached a key resistance zone formed by the 100%(1869.17) Fibonacci expansion level of the first wave and the 61.8%(1849.19) Fibonacci expansion level of the second wave. In addition to this we have a potential bearish divergence that is forming between the first high that has formed at 1877.14 and the second current high that has formed at 1879.44 based on the MACD indicator. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme, we may consider these as evidence of bearish pressure. So everything looks good here for the bears and we may now move down to lower timeframe and see if we can find evidences supporting this short term bearish view.
Gold H1(1 Hour) Chart Analysis – Bearish Divergence, ADX Indicator
On the H1 chart, we have a bearish divergence that has formed between the first high that has formed at 1865.39 and the second high that has formed at 1879.44 based on the MACD indicator which we may consider as evidence of bearish pressure. 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 another evidence of bearish pressure. So the bottom line here is that the H1 chart has evidences supporting this short term bearish view. Until the invalidation level shown in the image below holds my short term view remains bearish here. If we get a valid breakout below 1850 level we may then consider it as a validation for this short term bearish view and may expect the price to move lower further.
Technical Analysis & Forecast Summary
Gold D1(Daily) Chart Analysis
- Key Resistance Zone, Potential Bearish Divergence, Stochastic Oscillator
Gold H1(1 Hour) Chart Analysis
- Bearish Divergence, ADX Indicator
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.
