Gold Short Term Forecast Follow Up And Update

Hi Traders! Gold short term forecast follow up and update is here. On October 25th I shared this “Gold Technical Analysis And Short Term Forecast” 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 Traders Academy Club. Spoiler alert – free memberships are available!

My Idea

Looking at the H1 chart, we could see that the price which was moving lower has created a bullish divergence that has formed between the first low that has formed at 1622.46 and the second low that has formed at 1617.19 based on the MACD indicator. The price then moved higher and broke above the last high at 1645.70 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently, it looks like a correction is happening. Also, the price which is currently moving lower has created a bullish hidden divergence that has formed between the first low that has formed at 1617.19 and the second low that has formed at 1643.98 based on the MACD indicator we may consider these as evidences of bullish pressure. Also, based on the Stochastic Oscillator, we could see that the price has reached its extreme which we may consider as yet another evidence of bullish pressure. So everything looks good here for the bulls and until the two strong support zones (marked in blue) shown in the image below hold my short term view remains bullish here.

 

 

 

Gold H1(1 Hour) Chart Current Scenario

In Gold, my short term view was bullish and I was expecting the price to move higher further until the two strong support zones hold. The price action followed my analysis exactly as I expected it to here. After the bullish convergence we had a pullback and the price which was moving lower reached the first strong support zone, respected it, moved higher from this zone and delivered a nice move to the upside until it was blocked by a bearish divergence. We then had a deeper pullback with the price reaching the second strong support zone, respected it and bounced higher from this zone, delivering a fantastic move to the upside!

 

 

On the M15 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower, reached the second strong support zone, created a bullish divergence between the first low that has formed at 1631.80 and the second low that has formed at 1616.67 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided a fantastic move to the upside!

 

 

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 bullish 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 at majority of the times and 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.