Yesterday, GOLD broke an important down-move trend line and resistance at around 1300, and traded as high as 1320. I think as the break looks real, we should be looking for short term buy opportunities. GOLD can trade a bit lower and then rise again to test the previous highs again.
Looking at 1 hour chart, the broken trend line comes in at around 1295 and resistance which may now act as a support is at around 1305 as shown below. So, if the GOLD drops lower close to any of the two levels, then we should enter a buy trade. One may also look for a bullish candle pattern on the 1 hour chart before entering into a trade to be on the safer side.
Initial target can be around 1340 and final target could be the previous high. Stop should be triggered on the 4 hour close below the broken trend line and support.
Reviewing yesterday’s events and trades
US dollar traded a lot lower yesterday after the US government reopened. EURUSD traded higher to set five month highs at around 1.3680. NZDUSD and AUDUSD too traded at monthly highs. US dollar weakened across the board. US jobless claims was released yesterday, which fell from 373K to 358K, but missed the expectations of 335K. Philadelphia Fed manufacturing index jumped to 19.8 beating the expectations of 15.0. Other than this, Chinese GDP figures came as expected, which is keeping risk dominated theme intact.
Fundamental Outlook for the day
No important fundamental event is scheduled from the US later in the day except a low risk event, CB leading Index. Furthermore, Canadian inflation data is lined up later in the NY session, which is expected to remain stable from the previous outcome. It would be interesting to see whether the US dollar recovers some of the lost ground going into the weekend or not. I think we should stay away if our trade plans do not work as expected. Better be on the safe side friends.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, USDJPY, GOLD, AUDCAD and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Have a great weekend. Happy trading!
