Hi Traders! Gold short term forecast update and follow up is here. On September 14th 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 Traders Academy Club. Spoiler alert – free memberships are available!

My Idea

On the H4 chart, the price which was moving higher created a triple wave to the upside and while measuring this triple wave using the Fibonacci expansion tool we have a key resistance zone that has formed by the 161.8%(1825.96) Fibonacci expansion level of the first wave and the 61.8%(1836.46) Fibonacci expansion level of the second wave. The price respected this key resistance zone and bounced lower from this zone. We also had a bearish divergence that has formed between the first high that has formed on 17th August 2021 and the second high that has formed on 3rd September 2021 based on the MACD indicator which we may consider as evidence of bearish pressure. Currently it looks like a correction is happening, after the first leg to the downside, it looks like a flat correction is happening in the form of a range now. Until the top of this range holds my short term view remains bearish here and I expect the price to move lower further towards the key support zone formed the 38.2%(1777.56) – 50%(1760.15) Fibonacci retracement zones of the triple cycle.

Gold H4(4 Hours) Chart Current Scenario

On the H4 chart, based on the above-mentioned analysis my short term view was bearish and I was expecting the price to move lower further until the top of the range holds. After the first move down we had a correction in the form of a range and the price which was moving inside this range, reached the top of it and broke above it, but the price then moved lower back inside the range. The price then moved lower further and broke below the bottom of the range, we may consider these as facts provided by the market supporting the bearish view. Then as you can see in the image below how the price moved lower further and has provided a fantastic move to the downside so far!

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 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.

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