Gold has been trading higher from the last two weeks as the US dollar weakened across the board. GOLD is making an up-move from the past couple of sessions, but I think GOLD should move lower again from higher levels. There is a bearish hidden divergence forming on the daily chart as shown below, which adds value to our bearish view.
There is also a continuing divergence forming on the 4 hour chart. There are three major resistances at around 1354, 1365 and 1380 as shown in the chart below. I think we should be looking for a sell opportunity from any of these levels. If GOLD moves higher, makes a stop at any of these resistances and forms a bearish candle pattern, then we will jump into a sell trade. We can enter at any of the three levels.
Initial target should be around 1325 and final target could be around the next major support at around 1280 as shown in the chart below. We will also look to take profit once the GOLD forms a bullish divergence on the 4 hour chart. Stop should be placed above the previous high.
Reviewing yesterday’s events and trades
US dollar gained some bids yesterday despite the mixed data from the US as the market’s focus shifts towards the upcoming FOMC interest rate decision. US industrial production data was released yesterday, which registered an impressive gain of 0.6% beating the expectations of 0.4%, and US pending home sales declined to -5.6% missing the expectations of 0.1%. So, the data was quite mixed and disappointing. However, the market ignored the data as the US dollar gained some ground against the major currencies.
Fundamental Outlook for the day
Today’s fundamental event calendar is packed with releases. We have US Core PPI, Core Retail sales, PPI data, Retail sales data, Business inventory data and CB consumer confidence scheduled later in the US session. Any disappointment in the data may cause the correction in the US dollar to halt, and any in-line data may help US dollar to gain some more ground. We need to be very careful with our trade setups as we head towards the FED interest rate decision tomorrow.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, EURCAD, GBPUSD, AUDCAD, AUDNZD and NASDAQ.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
