Hi Traders! Gold short term forecast follow up and update is here. On May 28th, 2024 I shared this “Gold Short Term Forecast And Technical Analysis” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. Also, we could see that the price which is moving lower has created a bearish trend pattern in the form of three lower highs, and lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then a further continuation lower. Currently, it looks like a correction is happening and in addition to this there are no signs opposing this short term bearish view at the moment. Also, we had two strong support zones that have formed, the price moved lower broke below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold my short-term view remains bearish here and I expect the price to move lower further.
Gold H1(1 Hour) Chart Current Scenario
On the H1 chart, based on my technical analysis, I mentioned that “Until the two strong resistance zones (marked in red) shown in the image below hold my short-term view remains bearish here and I expect the price to move lower further”. The price action followed my analysis exactly as I expected it to here. We had a pullback with the price reaching the first strong resistance zone, respected it and then the price provided a first move to the downside. We then had another pullback, with the price reaching the first strong resistance zone again, created a false break of it. The price then provided a second move to the downside and delivered an excellent move as you can see in the image below!
On the H1 chart, the market provided us with various facts supporting the bearish view. The price, which was moving higher, created a bearish divergence between the first high, formed at 2374.88 and the second high, formed at 2387.76 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view, and also there were no signs opposing this bearish view. Then as you can see in the image below, how the price moved lower further after that and provided an excellent move to the downside!
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here, and there were no signs against it. When the facts do happen as we expected, you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us with the majority of the time, it’s our obligation as traders to be able to listen to these things that the market tells us, and we should try to make the right actions accordingly.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
